South Korean media expects the country’s President-Elect to raise the crypto tax ceiling to ensure consistency with stock market traders – and to take a risk with pro-crypto policies. However, rather than a laissez-faire approach, this is likely to result in increased regulation.
As previously reported, the main opposition candidate, former Prosecutor-General Yoon Suk-yeol, won power in a hotly contested general election earlier this week, defeating his closest competitor by less than a percentage point. In order to gain the votes of younger folks, both candidates announced a variety of pro-crypto manifesto pledges.
But the real concern for most crypto traders is whether Yoon will keep his promises when he takes office in May.
Yoon is a political person about whom nothing is known. As a professional prosecutor, he only revealed his intention to run for government less than a year ago, and he has never previously run for any other political position.
However, South Korean media sites such as Yonhap and News1, as well as Money Today and Hanguk Kyungjae, studied the President-crypto Elect’s views and manifestos, and published quotes from industry insiders who sought to predict the future of crypto under the soon-to-be President.
The promise to create parity between crypto tax payment thresholds and KOSPI stock dealers was likely the most eye-catching of all his crypto commitments, according to the outlets.
The current Moon Jae-in administration enacted legislation requiring all crypto-related earnings or trading profits above USD 2,100 per year to be subject to a 20% capital gains tax penalty. When the new regulation goes into effect, Yoon has promised to raise that level to around USD 41,000 per year (the existing ceiling for KOSPI traders).
Legal experts, according to the media, have said it will be “tough to draft legislation and handle taxation difficulties in a short period of time,” and have already asked Yoon to decrease potential friction “as much as possible” through “conversation with the [crypto] business.”
Yoon also promised to “examine” and potentially repeal a blanket ban on token issuances on South Korean land that has been in effect since 2017. He has also spoken positively about NFT adoption.
The President of the Korea Blockchain Association industry pressure group, Oh Gap-su, was cited as saying:
“I am confident that President-Elect Yoon will keep the promises he made to the people about blockchain and cryptoassets.”
Yoon has also promised to draft a forward-thinking “digital asset” statute that would focus on improving “investor protection” and eliminating market manipulation, as well as ensuring that crypto operators are adequately insured against the risks of “hacking and errors.”
He went on to say that the strategy would pave the groundwork for the establishment of specialized financial institutions that would “connect digital asset trading accounts and banks.”
Industry insiders believe that corporations that want to invest in cryptoassets should be permitted to do so, and that “governmental support for academic research” should be encouraged as well.
However, blockchain industry insiders were noted as saying that with little international precedent, Yoon’s proposals would be delving into unknown territory.
According to one unidentified source:
“There are still relatively few foreign cases that can be cited, so I hope that [President-Elect Yoon] would actively connect with the industry during the legislative process.”
In the run-up to the election, Yoon was cited as saying that “in preparation for the emergence of […] digital assets,” his government will “promote technology growth” and “preemptively establish an institutional framework.”
As part of his campaign, he also visited key cryptocurrency exchanges and spoke about “creating an atmosphere where cryptoasset investors may invest with confidence.”