South Korean tax panel warns crypto loss carryforwards may fuel speculation

A South Korean National Assembly tax subcommittee has raised concerns that allowing tax loss carryforwards for virtual asset, or digital asset, investments could reinforce speculative trading, Digital Asset reported. According to the National Assembly’s 2026 regular session review materials from the tax subcommittee of the Public Finance and Economic Planning Committee, the committee said permitting digital asset loss carryforwards could produce the effect of strengthening the market’s speculative nature. The committee said past approval of carryforward deductions under the former financial investment income tax was rooted in a policy goal of expanding incentives to invest in risky assets and fostering venture capital. By contrast, it said the digital asset market, unlike South Korea’s domestic stock market, does not warrant policy support. It also assessed that arguments for allowing carryforwards for digital assets on fairness grounds with that tax system lack sufficient basis, given that the financial investment income tax has been scrapped. The committee also raised concerns about tax fairness with other investment assets.