South Korea’s Treasury, the Financial Oversight Service and the Treasury Department have partnered with various financial authorities to crack down on illegal crypto activity.
This approach aims to contain money laundering and fraud related to cryptocurrencies, as recognized by the Office for the Coordination of Government Policies.
The booming crypto market
The cross-agency crackdown was triggered by likely illegal activity and speculative investments sparked by a booming crypto market.
Koo Yun-Cheol, the head of the Government Policy Coordination Office, noted:
“Particular attention must be paid to the occurrence of illegal activities with virtual assets.”
The Financial Services Commission (FSC), the country’s financial supervisory authority, will require financial institutions to improve their monitoring apparatus when withdrawing cryptocurrencies as part of the review process.
Curb tax evasion
According to the announcement:
“The financial watchdog also plans to closely monitor illegal transfers of virtual assets overseas. The state tax authority will focus on suspected tax dodgers stashing assets in cryptocurrencies. “
In February, the South Korean Ministry of the Economy and Finance announced that investors who earn at least 2.5 million won, or about $ 2,260 from crypto trading, would be subject to a 20% tax from 2022.
This revelation came after the country’s annual tax legislation revision allowed by the National Assembly in December. The taxation of cryptocurrencies has been a burning issue in South Korea since the cryptocurrency taxation law was passed in the national parliament last year.
Bank of Korea Governor Lee Ju-Yeol warned citizens against over-investing in crypto due to its high volatility in prices, which could jeopardize financial stability.
In other news, the South Korean government plans to issue blockchain-enabled COVID-19 vaccine passports to immunized citizens to revive cross-border travel and keep the risk of infection under control.
The vaccination records will be linked to a digital certification system based on blockchain technology to check a person’s coronavirus vaccination status from this month using a smartphone application.
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