South Korea's newly elected president, Yoon Suk-yeol, will become president in May. He is a strong supporter of crypto and is even investigating the ban on ICOs. He also has his own NFTs. He promised, among other things, a tax reduction on crypto and the approval of Initial Coin Offerings (ICOs), where investors can buy the first coins of a project, reports Nikkei Asia. Will South Korea be the new Bitcoin paradise?
A member of the conservative People Power Party, Yoon also pledged – in addition to approving ICOs – not to tax cryptocurrency trading profits. This would apply up to an amount of 50 million won (£38,337). This way, crypto gains are charged the same as equity gains.
Bitcoin tax in South Korea
South Korea's new president is especially popular with crypto owners because of certain election promises. For example, he promises to raise the limit of tax-free crypto assets from 2,000 to 40,000 dollars. A nice bonus for many South Korean owners of Bitcoin or other cryptocurrencies. This promise would make South Korea the largest crypto tax haven in the world.
In addition, the new president of South Korea is exploring options to roll back the ban on Initial Coin Offerings (ICOs). A move that caused a lot of division in the country. Due to the many scams, ICOs were banned in South Korea in 2017. An ICO is a form of crowdfunding to raise capital using cryptocurrencies. You buy digital tokens in the hope that the project will be successful and its demand and value will increase in the future. Very risky, because the project is only launched once the funding target has been achieved.
Ban on ICOs
With the current ban on ICOs and tax-free profits changing to $36,650, crypto investors have a lot to get excited about. South Korean crypto start-ups no longer have to move to countries such as Singapore if they want to organize an ICO.
“With ICOs now banned, we have no choice but to issue coins in Singapore and other countries. Ventures and startups will be able to easily raise money from investors if the ban is lifted,” said the secretary general of Korea Blockchain Association.
Coins rose after current president's loss
61-year-old Suk-yeol campaigned strategically, targeting young voters during the election. He is heavily into non-fungible tokens, and during his election campaign he even launched his own NFT collection. The election victory was a historic neck-and-neck race. Suk-yeol defeated his Democratic rival by a minimal difference.
South Korean currencies rose sharply after the president's gains. The current president, Moon Jae-In, took a hard line against crypto exchanges. They were no longer allowed to accept South Koreans as customers from September 2021. In addition, there was virtually no clarity about the tax on crypto. That will now change, if we are to believe Yoon's promises.
Support of Democratic Party is crucial
However, these plans can still be interrupted. That is because several parties have to give approval, according to news platform Nikkei Asai:
“Yoon can implement some of his cryptocurrency policies, but his 'no tax' pledge needs the National Assembly to review a tax bill. The legislature will also need to pass a bill to create an agency to regulate digital assets.”
The news platform says that this requires the cooperation of the Democratic Party of the current president, who was therefore not such a fan of crypto. This party has a majority of 300 seats in the legislature.
Will promises be kept?
The crypto news has been boosted by Yoon's gains. But whether his promises come true depends on several factors. The enthusiasm was reflected in crypto prices, including the South Korean ICON (ICX), which rose 60% in the hours after the election. However, this could go the other way if third parties thwart Yoon's plans. From May, when Yoon joins, we will hear more about this crypto president's promises.
