In a significant announcement that aligns with upcoming general election strategies, South Korea’s ruling People Power Party has proposed postponing the implementation of cryptocurrency taxation by two years, shifting the commencement date from January 2025 to 2027. Considering this, the move shows the party’s desire to first regulate the sector and then focus on prioritizing the development of the dynamic cryptocurrency market. 

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• South Korea’s People Power Party proposes a two-year delay in cryptocurrency taxation, pushing the start date from 2025 to 2027.
• The ruling party focuses on establishing regulatory measures for the crypto market before applying tax laws, with a comprehensive bill expected.
• High-ranking government officials will be mandated to disclose their cryptocurrency holdings to prevent conflicts of interest, starting next year.

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South Korea Delays Cryptocurrency Taxation, Prioritizes Market Regulation

The post by Herald Business Daily notes that the government has delayed the decision as it is advancing with the push for a bill to outline a detailed framework of regulations that will provide the paths for the regulation of crypto custody and the procedure of token creation. 

The regulatory proposal precedes taxation, and it prevents the market from getting exploited and investors from getting too victimized. The culmination of that is that the Ministry of Economy and Finance has sent a representative, who has suggested that cryptos might be excluded from the determination of income tax, and this is in line with the review of taxes they are undertaking on all financial investments, among them stocks and funds.

However, the People Power Party has not advocated for a complete tax repeal but is looking to harmonize the tax threshold for cryptocurrency with that of stocks, addressing concerns about fairness and consistency in taxation.

As public transparency and ethical governance are the ideas that the South Korean government is pushing, this year they have made it mandatory for officials to declare their crypto-holdings. This issue is to ensure that there are no conflicts of interest among government officials and to keep the high levels of ethics within the government system.

Adding to the international dimension of cryptocurrency regulation, Lee Bok-hyun, the chief of South Korea’s Financial Supervisory Service, is slated to meet with Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission, to discuss regulatory approaches.

​Diligently, the People Power Party is making efforts to materialize its electoral promises, which are anticipated to have a revolutionary effect on the crypto environment of South Korea in the future. 

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