South Korean Brokerage Firms Pursuing Crypto Exchange Ventures
Despite the challenges posed by the ongoing crypto winter, major global corporations are still eager to enter the blockchain and cryptocurrency space. Seven firms are actively seeking preliminary approval to establish crypto exchanges in South Korea, with Samsung Securities and Mirae Asset Securities among them, demonstrating the growing institutional interest.
Samsung Securities operates under Samsung Futures Inc. and has been researching the best methods to enter the cryptocurrency exchange market. This study focuses on blockchain-based security tokens but is also shaped by the company’s struggles in recruiting talent for its crypto trading platform in 2021.
Mirae Asset Securities, another company in the report, is the largest investment bank by market capitalization in South Korea, with assets under management exceeding $648 billion. The firm has set up a subsidiary through its affiliate Mirae Consulting to manage the crypto exchange and is actively hiring technical personnel to focus on cryptocurrency and non-fungible token (NFT) research and development.
Factors Driving Recent Institutional Interest in Digital Assets in South Korea
After Yoon Suk-Yeol’s election as President of South Korea, institutional interest in digital assets has surged. His campaign gained traction when he promised to introduce crypto-friendly laws and relax regulations on Bitcoin and other cryptocurrencies. In contrast, the previous president, Moon Jae-In, had sought to regulate the cryptocurrency market through a complex exchange registration process. Under President Yoon’s administration, regulations are being relaxed, even though some recent cryptocurrency project collapses have led to more stringent oversight. Nevertheless, established companies like the seven brokerage firms remain undeterred and are advancing into the crypto industry.
During his campaign, President Yoon expressed the need for a more flexible regulatory framework, advocating for a shift to a negative regulatory system that would promote growth within the digital asset sector.
In support of these initiatives, South Korea’s Financial Services Commission (FSC) is working on revising existing laws and accelerating the Digital Assets Framework Act. This revision aims to create a unified regulatory framework for managing digital assets, distinguishing between security tokens and non-security tokens. The FSC will also assess whether domestic digital assets can be classified as securities. This regulatory shift is intended to benefit firms like Samsung Securities and Mirae Asset Securities, who are looking to establish crypto exchanges, and is in line with requests made by the Korea Financial Investment Association.
Implications of South Korea’s New Tax Regulations on Crypto Profits
The Ministry of Strategy and Finance (MOFGBKR) recently announced that crypto airdrops, staking rewards, and hard-forked assets will be subject to gift tax, in line with the Inheritance and Gift Tax Act. This marks a departure from the government’s previous statement that crypto gains tax would be postponed until 2025.
Recipients of crypto airdrops will be subject to a gift tax, with rates ranging from 10% to 50%. The recipient must file a tax return within three months of receiving the asset, and the tax will be assessed individually based on the amount received.
