South Korea is a country with high crypto awareness: at least 10% of adults are considered to be crypto investors.
Its legislation, however, is far from perfect: while the comprehensive legal framework on crypto is still missing, some aspects, like the AML rules, are very strict. Unreasonably strict, some would say: ICOs are de facto prohibited, crypto service providers must comply with very stringent KYCs, and margin trading is considered akin to gambling. This led to many crypto companies leaving South Korea for Singapore or other countries.
Nonetheless, more and more young adults are interested in crypto, and some even manage to trade it good enough to offer themselves a house – almost unrealistic dream for many young Koreans, struggling with sky-high real estate prices. It’s no surprise then that crypto was one of the topics raised by the presidential candidates in the wake of this week’s election, and a liberal candidate Lee Jae-myung even fundraised with NFTs.
Slightly more Koreans voted for his competitor, a conservative candidate Yoon Suk-Yeol, who pledged to deregulate the crypto market and unleash the South Korean potential in the crypto industry. He said that the existing regulations were “far from reality and unreasonable”. Among other things, Mr Yoon also promised to raise the crypto capital gains tax threshold from 2.5M KRW (~$2k) to 52.4M KRW (~$42k) – a tax that should take effect in 2023.
While the world is increasingly eager to tighten the regulatory screws on crypto, South Korea seems to be going in the opposite direction.
A winning bet?