All about Bitcoin and cryptocurrencies in South Korea

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Instructions on what you should know during operation Bitcoin, other cryptocurrencies or technologies Blockchain in South Korea.

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Many well-known analysts and economists agree South Korea is one of the most important countries for the world of cryptocurrencies. because the nation has one of the highest trading volumes internationally and is between third and fourth place among the most reputable digital currencies.

With one of the strongest and most stable economies on the Asian continent and one of the highest levels of development in the region, South Korea is one of the friendliest destinations for the ecosystem of digital currencies and technologies. Blockchain. Despite the fact that it has tightened its fraud prevention policy in recent years, the country has a very good reputation among those who are interested in doing business with these assets.

This new edition of “Everything you need to know …” deals extensively with some aspects of the current situation of digital currencies and Blockchain in South Korea examines the legal, economic, technological, and social considerations that apply to cryptocurrency and block network management.

Legal situation

Although government agencies have taken important initiatives from a legal perspective, currently (April 2020) South Korea does not have a specific legal framework that sets out clear rules for the use and management of cryptocurrencies within the country. However, it is worth highlighting certain important aspects that determine important guidelines for the local operation of these assets.

First, the position of the Financial Supervisory Service (FSS) for its acronym in English), which stated in 2017 that digital currencies as Bitcoin They cannot be viewed as fiat money, electronic means of payment, or financial investment instruments. The Supreme Court The country set an important precedent in 2018 by deciding that cryptocurrencies can be confiscated as profits from criminal activity, which assets are recognized as property if there is no clear definition for them.

One of the most controversial aspects of the Financial Services Commission (FSC) In 2017, it had to do with the marketing ban for first offers of new cryptocurrencies (ICOs), that violate the provisions in the Financial investment and capital market law, by spreading the emission of Security token (Securities) and the associated risks for potential investors. In early 2018, the local government ordered the suspension of banking services for exchanges, but in October of the same year, this measure was reversed so that platforms were able to offer their customers the Fiat crypto exchange.

However, the most notable event took place in early March 2020, since South Korean National Assembly passed an amendment to the Law on Reporting and Use of Specific Financial Information, which fully legalizes cryptocurrency trading within the country. This measure gives the exchange greater legitimacy in the conduct of its operations and contains some provisions to prevent money laundering and terrorist financing.

Tax aspects

One of the aspects that make South Korea a very friendly jurisdiction for companies in the crypto ecosystem is that for now The country has no tax regulations that apply to the use and management of cryptocurrencies at the local level.

For companies, they are only required to pay the appropriate taxes for their business, based on the income and expense balance that corresponds to the company name that applies to their business models. While people who own cryptocurrencies are not required to report their assets to the tax authorities, there are no restrictions on their ownership or use.

It should be noted that the Ministry of Strategy and Finance The country is currently working on tax plans for cryptocurrencies, but currently neither the agency nor the National Tax Service They lay down specific guidelines that are fully legitimized as law.

Cryptocurrency mining in South Korea

Initially, the country was also for individuals and companies interested in performing digital currency mining, such as: Bitcoin. However, due to the drop in the price of the major cryptocurrencies, this practice was not profitable for those who did this work on a small, medium, or large scale.

This was verified by a report published in early 2019, stating that at least 80% of the country’s mining companies ceased operations because the profits derived from them no longer covered operating costs for electricity consumption. Internet costs and equipment costs.

From a tax perspective, those who practice this practice are not required to pay tax on these activities. However, one case that reached the local courts highlighted the illegality of doing this practice on a large scale in secret, as the defendants used industrial facilities to generate crypto funds.

The most popular currencies

Given that South Korea in South Korea is characterized by the management of a very stable economy and appears as a nation that is open to the use of new technologies, the commercialization of digital currencies makes more sense as a commercial way to multiply invested capital using volatility . present in the main markets.

Therefore, the most commonly used currencies are those with the best commercial reputation, such as Bitcoin. However The country is the second largest nation in the world with the highest trade volume of Ether, This is one of the most popular cryptocurrencies among connoisseurs.

Nevertheless, the stock exchanges operating in the country manage a very wide catalog of cryptocurrencies, where in addition to the above, others such as Bitcoin Cash, Litecoin, Ripple and a variety of tokens ERC-20.

Operative exchange

The stock exchanges that offer their services within the country include platforms such as Huobi, OKCoin, Korbit, Bithumb, UpBit, Coinmama, Kraken, amongst other things.

Other alternatives that are very popular are P2P platforms like LocalBitcoins and LocalEthereum, which enable the purchase / sale of coins such as Bitcoin y ether Offer the parties with fiat money to customize the most convenient payment method.

Commercial adoption

Despite the fact that digital currencies are booming commercially, The number of traders who accept crypto in South Korea is quite low contrary to what many might think.

According to the portal Coinmap.orgThere are just over 150 commercial entities that accept cryptocurrency payments for products and services that are mainly collected in cities like Seoul, Seongnamsi, Bucheon, and Incheon.

Concentration of merchants that accept cryptocurrency payments in South Korea. Image taken from Coinmap.org

The companies that usually accept this form of payment in the country are usually Shops, restaurants, hotels, bars and tourist attractions.

Finally, in terms of technology adoption Blockchain, Local government shows great interest in its potential to strengthen the products and services offered by the public and private sectors at local level. As part of the foregoing, the National Security Agency provided a $ 9 million special fund in 2019 to support startups in this sector.

In September 2019, the country’s most important banks announced their inclusion in the Interbank Information Network (IIN) supported by JPMorgan, It allows financial institutions to test the potential of this technology first-hand, especially when it comes to exchanging data and facilitating international transactions.

One of the most important private companies in the country, Samsung, has already started testing with this technology. According to reports published in late 2019, the network is Blockchain Nexledger enables the exchange of digital assets for which a is implemented Zero Knowledge Tests (ZPK) and This guarantees the privacy of the participants.

But the most interesting step in the country in favor of technology Blockchain and cryptocurrencies announced it Central bank, which indicated on April 6 that it will begin piloting to test its own digital currency. This information was available on the financial institution’s website, where it stated that this plan would be used for an in-depth technical review to refine details for its possible introduction in the coming years.

Everything you need to know about Bitcoin and cryptocurrencies in the world

Articles by Angel Di Matteo / DailyBitcoin

Image created with Canva

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