South Korea Is On Its Way To Become An Asian Crypto Hub, And Here’s Why.

South Korea Is On Its Way To Become An Asian Crypto Hub

South Korean president-elect Yoon Suk-Yeol’s administration has included the establishment of a Digital Asset Framework Act on a list of 110 tasks that his administration would handle in months.

The plan’s details include establishing appropriate “conditions” for investors who want to invest in “digital assets” with “confidence.” However, more critically for major corporations, the committee mentioned allowing “domestic ICOs,” but with “issuance methods” that give “investor safeguards.” Moreover, the presidential committee stated that when investor protection law is in place, the tasking of digital assets would be analyzed.

The proposed Digital Asset Framework Act would include “measures to protect consumers and improve transaction stability” in South Korea, and may include both ICOs and non-fungible token issuance (NFTs). For crypto exchanges, further token listing requirements are likely to be introduced.

Domestic ICOs would be organized into a “regulatory system” under the proposed law, with tokens classified as “security type” or “non-security type,” and a government-appointed body ruling on problems such as the utility of a token and whether it was intended for use in the payments and settlements markets.

“Security type” coins would have to be issued in compliance with the requirements of the Capital Market Act, which oversees the issuing of traditional securities and contains a number of “investor safeguards.”

Meanwhile, “non-security type” coins would need to be minted inside a system that guarantees listing and “unfair trading prevention” measures are followed.

The crypto tax in South Korea was supposed to go into effect in the fiscal year 2022, but it was postponed until 2023 in December. According to E-daily, Yoon will ensure that the crypto tax bill does not take effect until a reasonable consumer protection law is in place, which may be as early as 2024.

Since March, when Yoon won the election, the president-elect’s presidential transition team has been looking at delaying the tax on the grounds that there isn’t enough legislation in place to justify levying taxes on digital assets.

SK Group, South Korea’s third-largest corporation, announced plans to launch its own cryptocurrency through its investment arm, SK Square. It is also working on a blockchain service for its partners to help with cryptocurrency issuance. Both projects are still in their early stages, and the company plans to launch a token through an ICO later this year.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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