South Korean investors petition for further delay in crypto taxation

A South Korean citizen has posted a petition on the official website of the National Assembly, the country’s legislative body, requesting the South Korean government to postpone taxation on cryptocurrency gains.

If the petition, submitted on March 21, reaches 50,000 signees by April 20, local lawmakers will be required to review the subject matter. It currently has 10,888 signatures as of Tuesday afternoon in Asia.

“There is concern of a large-scale exodus of crypto investors to overseas exchanges if the country starts taxing investors when it is not fully prepared,” the petition said. “Please postpone it for two years and thoroughly review the expected problems, and discuss taxation later.”

The country’s crypto gains tax is currently scheduled to go into effect in January 2025, after being pushed back from the initial starting date of Jan. 1, 2023. Another two-year delay would postpone the tax plan to start in 2027.

The petition also requested more oversight of the Digital Asset Exchange Alliance (DAXA), an advisory group consisting of South Korea’s top five exchanges. DAXA often leads the five exchanges to make concerted actions to delist certain cryptocurrencies. “DAXA's criteria for judging whether to support and terminate transactions are unclear, and there is room for arbitrary judgment,” the petition said. 

Crypto fever in Korea

South Korea hosts one of the biggest and most vibrant cryptocurrency markets in the world. Upbit, the country’s most popular exchange that holds the majority of the local market share, has processed $185 billion in trading volume so far in March, according to data from The Block. This accounts for nearly 9% of the total exchange trading volume in the world.

The local crypto fever has gotten stronger in recent months with the bull market cycle. According to local reports , South Korean exchanges saw a trading volume of 11.85 trillion Korean won ($8.8 billion) on March 11, exceeding the trading volume on South Korea’s KOSPI stock market.