South Korea Cryptocurrency Regulation Update | 10,000 People Petition for Resignation of South Korea's FSC Chairman, Young People Without Homes Criticize: If Taxation is Required, Then Legalize

In the past few months, the rise of cryptocurrencies and the premium on Bitcoin have prompted South Korean legislative institutions to increase regulatory efforts. As a result, local cryptocurrency investors and supporters have submitted petitions in an effort to push back, with over 100,000 signatures collected.

According to local media outlet "Newsis," within a short period of three months, South Korean cryptocurrency enthusiasts have submitted several petitions to the South Korean presidential office, the Blue House, requesting the resignation of Eun Sung-soo, the Chairman of the Financial Services Commission (FSC). The total number of signatures on the petitions has exceeded 100,000.

South Korea's Cryptocurrency Taxation

The first petition received over 51,000 signatures by the deadline of 3/12. According to Yonhap News Agency's report, South Korea announced the "2020 Tax Law Amendment" in July last year. If earnings from cryptocurrency exceed 2.5 million Korean won (approximately 62,835 New Taiwan dollars), a 20% capital gains tax will be imposed.

The article points out that this targeted taxation mechanism, compared to the stock market, is discriminatory. FSC Chairman Eun Sung-soo stated in a national assembly meeting on the 22nd of this month:

The government will not introduce protective policies just because the number of investors is increasing. Cryptocurrency cannot be accepted as a financial asset; it is merely a speculative medium, a "road to nowhere," and seniors need to correct the wrong investment choices made by young people.

Anger of Homeless Youth

The petition criticizes this as a double standard, emphasizing that cryptocurrencies are always labeled as speculative, but what about real estate:

The elderly have made a fortune over the past few decades through real estate, and now cryptocurrencies seem like opportunities for the future. However, various regulations are being introduced one after another, and they are actively preventing wealth distribution for the 2030 generation. No matter how hard I try, I still can't afford a house.

In addition, several petitions with similar views demand that if taxation is required, then cryptocurrency assets should be legalized; criticize the government's claim that they will not introduce regulations to protect investors, yet impose a 20% capital gains tax. The authors sarcastically question:

Claiming to be adults, not protecting children, and still taxing the children, is that right? If investing in cryptocurrencies is to be prohibited, please bring property prices back to their previous levels.

Crisis of Small Exchanges in South Korea

In addition to criticism of cryptocurrencies, FSC Chairman Eun Sung-soo also stated in the national assembly meeting that all exchanges in South Korea may close in September, causing concern. This is because among over 200 exchanges nationwide, no Virtual Asset Service Provider (VASP) applications have been submitted to the authorities.

Eun Sung-soo referred to the amendments made to the "AML" and "FTRA" regulations last year, which also apply to cryptocurrency exchange VASPs, requiring exchanges to register with the authorities.

The most important qualification for VASP registration is to have a formal cooperation relationship with local banks. As of now, only the four major Korean exchanges, Bithumb, Upbit, Korbit, and Coinone, meet this requirement.

FSC began accepting registration applications on March 25th, and the Korean Presidential Office of the Government Coordination OPC stated on 4/19 that April to September will be a special enforcement period to close any non-compliant exchanges.