South Korea's finance minister, Hong Nam-ki, admits that labeling cryptocurrencies as currencies was "misunderstanding," Reuters has learned. According to Hong, the country "will need to impose taxes" on gains from trading of cryptocurrencies.
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"It is inevitable," Hong added.
South Korea is expected to begin taxing capital gains from cryptocurrencies from January next year. Thus, annual profits from trading in cryptocurrencies in excess of $2,253 will be subject to capital gains tax of 20%. Hong's statement comes after Eun Seong-soo, Chairman of the Financial Services Commission (FSC), warned that South Korea might close over 200 cryptocurrency exchanges in Q3, 2021, if they do not follow the regulations. Eun also said that the government has no plans to protect cryptocurrency investors despite the fact it is going to tax them.
As iHodl reported, starting from March 25, South Korean digital asset companies must comply with anti-money laundering requirements. The Cabinet of Ministers of the country has given its support to a series of amendments to the Act on Reporting and Using Specified Financial Transaction Information aimed at the field of cryptocurrencies.
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