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South Korea Bans Bitcoin Futures As Authorities Consider Crypto Income Tax

Wilma Woo

Wilma Woo | Dec 06, 2017 | 16:00

South Korea continues to make headlines in the cryptocurrency world as authorities raided and confiscated property from three cryptocurrency exchanges following a January investigation. News

South Korea Bans Bitcoin Futures As Authorities Consider Crypto Income Tax

Wilma Woo

Wilma Woo | Dec 06, 2017 | 16:00


South Korea’s Financial Services Commission (FSC) has announced that Bitcoin futures trading will not be moving forward in the country.

‘Cooling Down The Market’

In legislatory warnings Tuesday, the regulator went against the trend gaining speed in the US and Japan and banned futures trading, along with suggesting a tax on virtual currency transactions.

The move has already resulted in the cancellation of several informational seminars on futures, local news outlet Korea Herald reports.

These include Shinhan Financial Investment, one arm of the Shinhan Financial Group which last month announced its bank was developing Bitcoin wallet facilities for customers.

An anonymous source at Shinhan Financial told the Herald:

Drawing investor attention to bitcoin futures could have been a way to cool down the overheated market.

Korea has adopted an increasingly wary stance on Bitcoin’s expansion this year, huge investor interest jarring with regulators keen to place stringent controls on related activity.

As of September of this year, ICOs are no longer permitted. Starting next month, traders will only be able to own one account for all their operations, this needing to be linked to their real identity.

“An entry of new technology into Korea is hamstrung by the regulation,” ex-Korbit exchange CEO Kim Jin-Hwa continued to the Herald.

Income Tax Could Come To Crypto Earnings

Bitcoin has meanwhile taken off in value following news that the US had given permission for Bitcoin futures to begin trading, these courtesy of CBOE and CME Group. In the days following, Japan also announced that it would allow futures trading as well, with regulators advising that a change in securities law was needed, following which they would appear “as soon as possible”.

Tokyo Financial Exchange CEO Shozo Ohta told Bloomberg:

To achieve that, we will launch… [a] working group to study various aspects, including bitcoin’s present status, its outlook, and what form it will take root in Japan’s society,

Korean financial watchdog FSC also announced today that it was considering income and income transfer taxes on payments made using cryptocurrency.

A National Tax Service official told Business Korea today:

The basic principle is to tax the income. It is important to collect detailed history data like who made transactions and how in a bid to impose taxes. To this end, we are considering the improvement in systems.

What do you think about the latest regulatory moves in South Korea? What impact will it have on the global Bitcoin market? Let us know in the comments below!

Images courtesy of Shutterstock

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