During the last months, the South Korean government has taking different regulatory measures to control the cryptocurrency market. Every single time that the government proposed new regulations, cryptocurrencies lost part of their value. But now the situation is in the other way. The financial regulator of South Korea, Choe Heung-sik, said that the government will support normal transactions of cryptocurrencies.
Cryptocurrency Support from South Korea
The information provided by Mr Choe Heung-sik has positively impacted the cryptocurrency market. At the moment of writing this article, the most important cryptocurrency, Bitcoin, is growing 3.96 percent and Litecoin 7.13 percent. The other cryptocurrencies in the market are registering moderate loses. Ethereum is down 0.98 percent, Ripple 1.36 percent and Bitcoin Cash 1.82 percent.
In the past weeks, Bitcoin reached its lowest price in three months when it was traded under $6,000. Now is being traded around $11.500, almost double than some weeks ago. The South Korean news may have helped Bitcoin performing better than other cryptocurrencies.
With this important information from South Korea, cryptocurrency traders may feel a little bit more comfortable investing in the market. Additionally, cryptocurrency exchanges in South Korea have reported incredible profits during 2017. But clearly, March and April are the months in which taxes should be paid.
According to local reports, cryptocurrency exchanges have registered $648 million dollars in profits. Upbit, has a market share of 52.9 percent, followed by Bithumb, Korbit and Coinone. This information allows the government to better regulate the market without crashing positive initiatives but avoiding tax fraud and evasion.
In March and April, cryptocurrency exchanges will have to pay 24 percent corporate tax and 24 percent local income tax of revenues earned during 2017.
South Korea Turns in Cryptocurrency Regulations
The South Korean government has been intervening the cryptocurrency market during the last months of the last year. It has decided to ban Initial Coin Offerings following China’s decision. And it was really close to ban cryptocurrency trading activities.
Apparently, the regulations took place in a moment in which the market was already developed. South Korea is one of the most active countries in the crypto market. The South Korean won usually has more trading activity than the Euro.
Furthermore, the government was certainly worried about millennials taking debts in order to invest in a very risky market. Additionally, the government imposed strict guidelines for cryptocurrency exchanges to follow. If they wanted to keep operating they had to have strict Know Your Customer (KYC) and Anti Money Laundering (AML) policies.
About regulations in the cryptocurrency space, the G-20 meeting that will take place in Buenos Aires will be important. The most important regulators all over the world, including countries like Germany, France and Japan, have decided that the most important topic will be related with cryptocurrency regulations.
Other important countries in the list like China or India have also been taking important measures to regulate the market. But South Korea has now an important percent of its population trading cryptocurrencies on a daily basis. If they ban crypto trading activities or banks from processing crypto payments, the consequences would be hard.