By
Chimamanda U. Martha
April 26th, 2024
South Korea stands out as one of the crypto-friendly nations in Asia, with regulations in place to govern the digital asset industry.
South Korea is gearing up to launch its crypto management system in 2025, just in time for the implementation of the country’s crypto gains tax in January of the same year. The country’s National Tax Service (NTS), which oversees the system’s development, aims to have it fully operational to ensure compliance with the new tax regulations.
South Korea Taps GTIC to Develop Crypto Management System
The system, known as the digital asset integrated management system, will be instrumental in tracking user information on exchanges and other crypto trading platforms. This will enable authorities to analyze and manage data related to crypto transactions, helping to prevent tax evasion in the digital asset space.
According to reports, the upcoming crypto management infrastructure follows earlier regulations that require digital asset service providers to report detailed transaction information to the country’s financial authorities. Once completed, the tool will be responsible for analyzing the data obtained from the exchanges to track tax offenders.
Following a thorough preliminary consultation process, the country has selected GTIC as the partner to lead the development of the asset management tool.
Authorities in South Korea view the introduction of the asset management system as a necessary response to the growing prevalence of illegal activities like money laundering, irregular inheritance gifting, and offshore tax evasion. They believe these activities are on the rise due to virtual assets’ anonymity and the decentralized nature of the blockchain, highlighting the need for a robust response system.
South Korea Embraces Cryptocurrencies
Meanwhile, South Korea stands out as one of the crypto-friendly nations in Asia, with regulations in place to govern the digital asset industry. Under the Act on Reporting and Use of Specific Financial Transaction Information, crypto service providers must register with the Financial Services Commission (FSC) and collaborate with local banks to provide real-name accounts to their customers.
Moreover, following the launch of spot Bitcoin ETFs in the United States in January, South Korea is contemplating introducing similar investment vehicles. The South Korea Financial Supervisory Service has announced plans to seek guidance from the US Securities and Exchange Commission (SEC) on the matter.
Last year, South Korea took a significant step towards transparency by requiring public officers to disclose their crypto holdings. The move affects approximately 5,800 elected officials and government employees, who will be required to report on their crypto holdings starting this year in 2024.
