In the world of magical internet money, tokens, and blockchain, volatility reigns supreme.
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Although the new regulations have provided a brief support to bitcoin traders, the trading volume and popularity of the virtual currency could likely to decline sharply. Since Bitcoin’s all time high, it has fallen over 40 percent.
“Of course, they were designed in many ways to avoid being regulated”.
Cryptocurrency investors and exchanges reacted positively after the government’s announcement.
According to the government, these new rules are geared to monitor the exchanges and crack down on speculative trading and possible crimes. Would South Korea benefit from it as well?
In response to the flurry of activity, the South Korean government has gone so far as to label the trend “irrational”.
However, unfortunately for crypto traders, things have taken another turn over the last 24 hours.
South Korea is home to one of the world’s largest Bitcoin exchanges and is the third-largest market for it, behind Japan and the U.S.
However, the tax is retroactive, applying to income from 2018 and 2017.
On Monday, Yonhap reported that the country’s cryptocurrency exchanges would be hit with hefty tax bills in a separate attempt to rein in the sector. Deposits and withdrawals are allowed only between real-name bank accounts and matching crypto-exchange accounts within the same bank. China once accounted for over 90% of global bitcoin trading. Two of the many requirements the government demanded local exchanges to comply with were the prohibition of foreigners from trading cryptocurrencies and the elimination of anonymous cryptocurrency trading accounts.
According to Bloomberg political coverage from December, Italy’s finance minister is also interested in crypto regulation.
The over reaction is typical in the crypto world, technically those profits were already taxable, G-BiTX has built an exchange based on compliance with worldwide money laundering laws and tax regulations and as the regulations tighten more and more people will turn to proper exchanges like them.
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Though South Korea’s government has announced tougher measures to crack down on the country’s heated cryptocurrency trading, major internet technology companies here are showing continued interest in investing in digital currency trading platforms. This stamp of endorsement could convince more people to set up accounts which would drive more money to the market ultimately.
