As reported by local news agency Yonhap, the South Korean government announced on Monday, January 22, that it will withhold 22% corporate tax and 2.2% income tax from cryptocurrency exchanges in the country.
The news is an unprecedented case of six major South Korean banks, with commissions related to crypto transactions from digital accounts increasing 36 times from 61 million won ($57,340) to 2.2 billion won ($2 million) in one year. It came just after the money laundering investigation was concluded.
South Korean exchange Bithumb earned a total of 317.6 billion won ($295,368,000) last year, according to Yonhap’s report, meaning it is expected to pay 60 million won in taxes, according to the tax rates announced Monday.
The announced rates are at the same level as South Korea’s taxes on companies with annual revenue of more than 20 billion won ($18.7 million).
Bithumb, the world’s largest exchange with a daily trading volume of $2.85 billion, was hacked in February 2017 and lost nearly $7M, mainly in Bitcoin and Ethereum. This and many other security threats on the South Korean stock market have recently been attributed to North Korean hackers.
South Korea’s government has begun accelerating cryptocurrency regulations within the country. Alongside financial investigations, the government banned the use of anonymous virtual accounts, stopped new virtual account openings, and banned underage and/or foreign users from trading on the exchange.
The people of South Korea started a petition to stop the government’s sanctions. Having reached the required 200,000 signatures, the campaign is now awaiting an official statement from the government.