More

    Korean Government Brings the Hammer Down on Bithumb, Taxing The Crypto Exchange $68 Million

    • Bithumb has been hit with an additional tax of 80 billion won ($63 million) by the IRS
    • The tax was imposed on income tax withholding for foreign users using the platform
    • However, there is no taxation policy related to cryptocurrency in the country

    The Internal Revenue Service has imposed an obligation on cryptocurrency exchange Bithumb to “withhold withholding” on income from cryptocurrency transactions by foreign users, reported local sources.

    As per this, Bithumb has to pay about 80 billion won, about $68 million in income tax on behalf of its foreign users.

    The exchange has to pay its taxes first and can then ask its foreign users to pay taxes for their previous trades to the exchange. However, given that these foreign users might be based out of South Korea, it's really isn’t possible.

    Bithumb in response is planning to take legal action against the National Tax Service request. However, the concern here is that there is no exact taxation system related to cryptocurrency in the country yet.

    No Income Tax Policy on Crypto Transactions

    The government has decided to set a tax policy on income tax on cryptocurrency transactions next year. The government plans to include the tax measures in the tax law revision to be announced in August 2020.

    For now though there are no laws or specific guidelines laid down. Nonetheless, the IRS currently classifies cryptocurrency income as other income and not capital gains.

    And before the government issued “emergency measures for overheating virtual currency speculation” and “prohibited the opening and trading of cryptocurrency accounts for minors and foreigners altogether,” foreigners were free to use the domestic Korean exchanges.

    As such, the IRS assumes all foreigners’ withdrawals are taxable and Withholding tax on other income is 22%.

    A Bad Time for Korean Exchanges

    It is certainly a bad time for exchanges, especially for Bithumb who suffered a loss of $180 million in 2019.

    It is one of the top four exchanges other than Upbit, Coinone, and Korbit that offer Korean Won (KRW) on and off-ramps.

    Bithumb used to be the number one crypto exchange in Korea but after hacking by North Korea, wash trading, and failed acquisition attempt by a consortium struck a bad blow to its reputation. The exchange has already cut down its staff by 40%.

    This move by the government, @DooWanNam of MakerDAO says could be,

     

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    AnTy
    AnTy
    AnTy has been involved in the crypto space full-time for over a year now. Before his blockchain beginnings, he worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    3,352FansLike
    2,771FollowersFollow
    4,133FollowersFollow

    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    44% Think Bitcoin's in a Bull Market & Alt-Season Will Occur in 2020: Kraken Survey

    In the currently unstable environment where industries are laying off, cryptocurrency exchange Kraken is on a hiring spree as it moves ahead to expand...

    Bitmain Releases Antminer E3 Firmware Update to Keep It Mining ETH Till October

    Mining hardware firm, Bitmain, set to extend the durability of its once “most powerful Ethash miner” from April to October 2020. The mining firm...

    Tether Prints over a Billion USDT in March, Rising Demand or Exchange Run?

    We are about to end March, a month that saw the price of bitcoin hitting $3,850 and ready to end the quarter with over...

    Bitcoin Beating Gold But What will Hold its Value Better in Five Years?

    The price of bitcoin is currently trading in the green by 2.34% as it trades around $6,450. Although down 11.89% YTD and about 34%...

    Lightning Labs New LSAT Protocol Promises To Do Away With Usernames And Passwords

    A statement from Lightning Labs CTO, Olaoluwa Osuntokun, revealed the specs of the Lightning Service Authentication Tokens (LSAT) which is expected to act as...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.