South Korea to Double Taxes, Says Cryptocurrency Exchanges Are Not Venture Firms

The government of South Korea has declined to go back on its position to exclude the cryptocurrency and blockchain industry from being specialized as venture firms and has denied a governmental proposal to this effect, In fact, the position will see cryptocurrency exchanges face the problem of their business and income taxes doubling while they will no longer benefit from a 75 percent cut in acquisition taxes.

Presently, a number of major Korean exchanges, few of the biggest in the world, including UPbit and Bithumb remain certified as undertaking businesses but that recognition is set to expire near the end of the year. Industry players including the Korea Blockchain Association, Korea Industry Promotion Association and the Korea Blockchain Startup Association have complained the move saying the measure will disappoint the industry as a whole.

The government of South Korea decided upon the proposal with its legislation in the National Assembly. The report said under the new government policy, cryptocurrency exchanges those will be newly set up this month or later cannot be certified as venture firms, painting an unwelcoming forecast for new startups entering the space. As per the news published in CCN, industry forecasters say the cut in tax welfares is certain to discourage research and development within the industry.

Recently, the Ministry of Science and Information Communications Technology (ICT) has been keen to increase the growth for domestic blockchain industry by pledging Government support for blockchain-related companies. Although the administration is looking forward to improving blockchain regulations, there is a general concern that their new policy concerning crypto exchanges will significantly impact the South Korean blockchain industry.

There is an increasing fear that South Korea’s new policy will damage the blockchain industry and cryptocurrency exchange policy as it may face the same consequences as their domestic gaming industry. As per BTC Manager, the new measure will also destroy blockchain technology development, country’s primary digital content exports and developer employment for the growth of the blockchain industry.

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