South Korea could soon start taxing Initial Coin Offerings (ICOs). The government is currently planning on taxing ICOs and virtual currencies. The information was released in a document submitted by finance minister nominee Hong Nam-ki a few days ago.
South Korea Could Tax Initial Coin Offerings and Cryptos
The plan to tax ICOs has been submitted to the country’s National Assembly. Hong explained that the new rules will be finalized according to the creation of taxation infrastructure. According to Hong, the task force will be formed by experts from different agencies such as the National Tax Service and the private sector.
Mr. Hong explained that virtual currencies are growing around the world and that there is no unanimous regulatory framework on the issue.
About it, Hong wrote:
“Cryptocurrencies are a new phenomenon and so there is no internationally agreed regulatory framework. Furthermore, there are such lingering problems as the market overheating and investor protection. Therefore, we need to be careful in building the regulatory framework.”
At the moment, Initial Coin Offerings are banned in the country. The government took this decision to ban ICOs back in September 2017 after the bank imposed by China in virtual currencies and ICOs.
This is why Hong mentioned that they will be determining the policy orientations on ICOs with relevant agencies. Additionally, they will evaluate the results of the financial regulator’s market survey and search for feedback from different experts in the industry.
Furthermore, the government took the decision to exclude crypto exchanges as start-ups. This is due to the fact that virtual currency exchanges face alarming security issues. Some months ago, the South Korean cryptocurrency exchange Conrail was hacked. $40 million in crypto were stolen by hackers.
In other countries such as Japan, other virtual currency platforms were hacked. Coincheck, one of the largest crypto exchanges in Japan was hacked at the beginning of the year losing 523 million NEM coins worth $523 million dollars.
In addition to it, according to some reports, the finance minister nominee mentioned that the government wants to do everything as possible to encourage blockchain technology. He said hat 9 out of 10 business types in the country are classified as blockchain businesses.