Korean Blockchain Groups Fear Crypto Exchanges Will Lose Tax Benefits From Law Amendments
South Korea Blockchain Groups Oppose Crypto Exchanges Amendments By Government
August 15th 2018 – Seoul, South Korea
Earlier in the year the blockchain regulatory bodies in South Korea proposed a motion to curb the increasing popularity of trading cryptocurrencies. The directive passed to all the cryptocurrency exchanges to use a real-name verification and to accept registration of Korean citizens alone stifled the industry in measure as the exchanges couldn’t go global. The latest reports emerging from South Korea on the exchanges spell déjà vu to all enthusiasts and fanatics of crypto.
There have been several reports emerging from South Korea as the Ministry of SME’s and startups proposed changes to the law governing the venture businesses in the country. The direct recommendation by the ministry for cryptocurrency exchanges to be declassified from SME’s and startups docket to a classification of gambling has angered many in the field. The calls to the amendment roots to the high volatility and speculation experienced in the cryptocurrency field for the last few years.
In a press release to newsrooms in South Korea, the ministry stated the “emergence of social problems like speculation led by cryptocurrency exchanges” was the cause of the change. The amendment has brought about massive complaints from the unions and activists of blockchain technology in the arena. They argue the move is against the technological growth of the industry as well as the overall cryptocurrency market in the country.
“If this legislation is implemented, domestic companies with the second largest number of blockchain technology patents after IBM will be excluded from classification as venture businesses just because they operate a cryptocurrency exchange,” – letter to the Ministry of SME’s and startups.
On August 14, 2018, the Korea Blockchain Association, the Korea Blockchain Startup Association and the Korea Blockchain Industry Promotion Association submitted their complaints to the minister of SME’s and startups regarding the amendment. In their letter they termed the move an obstruction to creativity and innovation in the blockchain field.
Notwithstanding, reports from South Korea show that there lies a plan to revise the existing tax benefits offered to cryptocurrency exchanges and blockchain companies. The country has been on a high trend with cryptocurrencies as seen earlier in the year when Coinmarketcap excluded the exchanges on their aggregates. The government continues to fight against the increasing speculation seen on the market without disrupting the overall blockchain ecosystem.
Regulation will be key from the regulatory bodies which can be done without necessarily classifying the crypto exchanges on entertainment and gambling. On their part however, cryptocurrency exchanges should ensure that the funds place in their accounts are kept secure and away from hackers to avoid cases such as Bitgrail and Mt. Gox in the country.