South Korea continues its fight with Bitcoin exchanges based in the country. Its new plan to deal with the crypto market may now include slapping massive tax bills on the exchanges.
One of the previous plans that South Korea floated around was a complete ban on cryptocurrency in the country.
Bitcoin Exchange Taxes
To combat its bloating bitcoin exchanges, South Korea is prepared to start collecting taxes on the earnings from bitcoin. South Korea previously made it easier to detect who has bought cryptocurrencies by making it illegal to buy anonymously. The country will attempt to make cryptocurrency operators hand over user data to banks, according to an unnamed government official.
South Korea's tax rate would not go above 24.2 percent on earnings from cryptocurrencies. The change would go into effect at the end of January or the beginning of February.
"Korea Financial Intelligence Unit announced that financial companies are in the process of drawing up a guideline to prevent cryptocurrency-related money laundering, although any specific measures are yet to be confirmed," said South Korea's Financial Services Commission.
This is just the latest in trying to get the crypto market more regulated in the face of increasing fears of a bubble. The value of cryptocurrencies across the board has dipped since the end of 2017. Bitcoin's value dropped from a high of over $20,000 in December, to a 50 percent decrease in January, where it was at its low point of under $10,000.
South Korea's Fight Against Bitcoin
South Korea is one of the largest Bitcoin markets in the world, and it is also the fourth largest economy in Asia. The country's bitcoin market already trades at a 30 percent premium when compared to other countries. This has made the country more proactive in trying to regulate cryptocurrency exchanges.
Previously, there were reports that South Korea would introduce a bill that would ban the trading of cryptocurrency. Fears of a ban started a sell-off before the market stabilized since any ban would have to go through the process of being ratified by the government.
Before that, South Korea instituted the end of anonymous trading, forcing those buying bitcoin to use their real names. South Korea also banned initial coin offerings in the country.
Governments are trying to bring the cryptomarket under control after falling prices are stirring fears of a bubble. South Korea has been one of the more forceful countries in regulating bitcoin.