South Korea's planned crypto tax faces criticism over fairness, clarity

Controversy is growing over South Korea's planned cryptocurrency tax, set to take effect next year, the Seoul Shinmun reported. The media outlet pointed to discrepancies in tax standards across different asset classes, fairness concerns compared to untaxed domestic stocks, and a lack of institutional readiness as key issues. An industry insider noted that tax standards for various transaction types—such as collateralized lending, use of overseas exchanges, and peer-to-peer wallet transfers—remain unclear. The source added that while domestic exchange activity can be tracked, capturing overseas transactions is structurally difficult. Kang Hyung-koo, a professor of finance and management at Hanyang University, argued that system design is more important than the tax rate itself. He suggested that the government should first define the characteristics and transaction structures of virtual assets before refining the tax framework. Kang also warned that classifying crypto gains as "other income" would create a significant administrative burden and could lead to market contraction, similar to what occurred in Japan.