Last week, we reported that Korean tax authorities were working on the legal infrastructure to tax earnings from cryptocurrency transactions.
The Korean-language blockchain website The BChain reports that Korea is not alone. Nations such as the United States and Denmark believe cryptocurrency could be used to launder money or evade taxes and are acting accordingly.
In Korea, observers believe the government will begin levying taxes on cryptocurrency earnings from 2021.
In some quarters, there is concern that the levying of taxes could accelerate an exodus of large-scale investors and cause chaos in the market.
While small-scale retail investors have little about which to worry as they face a light tax burden, large-scale investors and institutional investors could get hit pretty hard.
An industry official told The BChain that large-scale investors have a major impact on the current cryptocurrency market, and that the levying of taxes could spark an exit.
In particular, the official worried that large-scale investors could sell the same time, putting the cryptocurrency market into a long-term funk.
Top Exchanges Look Forward to 2020
Korea’s top cryptocurrency exchanges aren’t letting the impending arrival of the taxman get them down, though.
Executives from Bithumb, Korbit, and Hanbitco told attendees at a conference in Seoul that market conditions would improve next year.
“Speaking in a panel discussion at a conference held in Seoul, all three executives emphasized that there will be a new kind of demand for crypto in the following year and it will come from institutional investors and millennials.”
Decrypt also notes that Korean industry officials are supportive – more or less – of Seoul’s moves to regulate the cryptocurrency industry, something they hope will create a cleaner, more innovative market.