Korea’s DAXA Prohibits Relisting of Delisted Cryptos for a Year

Katsunobu Katō, a Liberal Democratic Party politician and Japan's Minister of Finance under Prime Minister Shigeru Ishiba's government since October 2024, has said that cryptocurrency assets can play a role in a diversified investment portfolio. Katō made the remarks while speaking at an event that was held in Tokyo related to the subject of crypto assets on Aug. 25, according to Bloomberg. Katō stated:''Crypto assets run the risk of high volatility, but if an appropriate investment environment is created, they can become targets for diversified investment.''Photo by JJ Ying on UnsplashGrowing crypto user baseKatō acknowledged that there is a growing user base in Japan related to digital assets. With that, he intends to work towards the provision of a healthy trading environment in Japan for stakeholders within the digital assets sector. The finance minister added that he has been trying to balance regulation with a need to leave the digital assets sector with sufficient freedom so as to enable the development of innovation. Crypto tax reformIt emerged over the weekend that the Japanese financial regulator, the Financial Services Agency (FSA), intends to include tax reform measures in respect of the crypto sector in 2026 tax revision proposals that it will bring to the Japanese government. It’s expected that the proposals, scheduled for submission by the end of this month, will call for a separate taxation category for digital assets and the implementation of a flat 20% tax rate. Under Japan’s existing tax regimen, crypto trading gains must be reported under the categorization of “miscellaneous income,” with those gains subject to tax rates of up to 55%. The move would bring taxation on crypto trading gains in line with the tax treatment that’s currently in place for equity trading gains. Equities have been given their own category and are taxed at a flat rate of 20%. Reclassifying cryptocurrenciesAdditionally, the FSA plans to propose legislation next year that would result in the reclassification of cryptocurrencies, removing them from their current treatment as a means of payment under the Payment Services Act. The regulator wants crypto to come under the Financial Instruments and Exchange Act, reclassifying it as a financial product. Katō has outlined his party’s commitment to the consideration of reviewing crypto asset taxation. That item was incorporated into his government’s tax reform plan for 2025, while the Japanese cabinet approved a proposal to amend the Payment Services Act back in March. As part of plans to have digital assets categorized as financial products, the FSA is also understood to be interested in broadening the scope of insider trading restrictions. Kato’s remarks are being interpreted as positive for the crypto sector. According to International Monetary Fund (IMF) data, Japan is the world’s fifth-largest economy, with a gross domestic product (GDP) exceeding $4.1 trillion.Source: World Economic Outlook (April 2025)In further positive news for the sector in Japan, it was reported on Aug. 18 that the FSA is likely to approve the issuance of JPYC, a Japanese yen-backed stablecoin, over the course of the coming months.

South Korea, Chainalysis Collaborate to Thwart North Korea’s Crypto CrimesSpecial Representative for Korean Peninsula Peace and Security Affairs Kim Gunn from the Ministry of Foreign Affairs held a meeting with Investigations VP Erin Plante and Korea Country Manager Paek Yong-khi of Chainalysis, a New York-based blockchain analysis company, according to the Ministry’s press release.Photo by Pixabay on PexelsGrowing North Korean crypto theftsSpecial Representative Kim and the Chainalysis representatives discussed response measures against North Korea’s increasing virtual asset theft and money laundering activities. Both sides recognized the severity of North Korea’s illegal cyber activities, which not only jeopardize national security by funding nuclear and missile development, but also threaten the establishment of a healthy cryptocurrency ecosystem.Chainalysis has been tracking North Korea’s illicit virtual asset operations and providing analytical information to a range of organizations, including law enforcement agencies and financial authorities.Special Representative Kim expressed gratitude for the private sector’s role in analyzing and monitoring North Korea’s crypto theft and money laundering activities. Both parties concurred on the importance of public-private cooperation to strengthen countermeasures against illegal cryptocurrency activities as North Korea’s techniques have become increasingly sophisticated.Plante also appreciated the South Korean government’s initiative in thwarting North Korea’s illicit cyber activities. These measures include imposing independent sanctions on North Korean hacker organizations and tech personnel and establishing a working group with the United States to counter North Korean cyber threats.Korean police and ChainalysisIn addition to its collaboration with the Ministry of Foreign Affairs, Chainalysis has been working with another Korean government agency. It was recently reported that the Korea National Police Agency (KNPA) is intensifying its efforts to enhance its expertise in investigating digital asset-related crimes. To achieve this goal, the KNPA is encouraging its officers to obtain certifications provided by Chainalysis.

Major Korean Crypto Exchanges Strengthen on NFT Projects Despite Crypto WinterDespite crypto winter, major Korean cryptocurrency exchanges Upbit and Bithumb strengthened on staff and included new non-fungible token (NFT) projects.US Tightening Policy Effects on Crypto MarketAccording to the electronic disclosure system operated by the Financial Supervisory Service, Upbit’s operator Dunamu saw a net income of 130.8 billion won last year, down by 94% from 2.21 trillion won. Bithumb also experienced a decline of 85% from 648.4 billion won to 95.4 billion won. This downturn is reportedly attributed to the tightening monetary policy by the US and weaker market sentiment on risky assets.Insights on Korean NFT MarketBoth exchanges, Upbit and Bithumb, having seen meager profitability in crypto trading, recruited more talent to embark on NFT projects. However, the picture is not so rosy for these new endeavors, considering the tepid NFT trade volume. According to The Block, the NFT trade volume last month reached $983.4 billion, which is lower than $1.4 trillion, the previous month’s record.The NFT trade volume on Upbit last month also experienced year-on-year and month-on-month decreases of 48.6% and 14.5%, respectively.Last week, Dunamu CEO Sirgoo Lee said in a shareholders’ meeting that its NFT projects are underachieving and that he is reconsidering the new projects from scratch. He added that Dunamu will build a solid foundation in Korea while promoting global businesses starting from the US through Levvels, a blockchain-based platform jointly established by Dunamu and the entertainment company HYBE.Outlook on the Korean MarketBithumb, on the other hand, will bolster new projects through Bithumb Meta and Rotonda. Bithumb Meta recently launched the beta service of its original metaverse Naemo Market where users can use NFTs to decorate their own personal digital space. Rotonda released Burrito Wallet last February to allow waller holders to store NFTs, cryptocurrencies, and fiat currencies.Meanwhile, there was a mixed outlook on the Korean crypto market. One person said in an interview with Hankooki that greater workforces in the country’s leading crypto exchanges could suggest the market’s growth, but also pointed out that their bigger sizes might hinder them from maneuvering when faced with other unexpected risks.