South Korea’s tax authority is spending roughly $2 million to build an artificial intelligence system that hunts down unreported cryptocurrency income — even as lawmakers push to eliminate the very tax that system would help enforce.
A Bill To Kill The Crypto TaxUnder current law, crypto gains would be hit with a 20% income tax starting in 2027, climbing to 22% once local taxes are added.
Song says that’s unfair. South Korea already treats digital assets as commodities under its value-added tax system, and layering an income tax on top, he argues, means investors get taxed twice for holding the same asset.
JUST IN: SOUTH KOREA OPPOSITION MOVES TO SCRAP 2027 CRYPTO TAX ENTIRELY
South Korea’s opposition party has introduced a bill to fully abolish the planned 22% crypto capital gains tax scheduled for 2027.
The timing sharpens the argument. Lawmakers recently abolished the financial investment income tax — a move aimed at supporting traditional capital markets and protecting retail investors.
Foreign investors also factor into the equation. Officials said taxing overseas participants would generate major administrative headaches, making enforcement more costly and complex than any revenue collected would be worth. The bill aims to keep rules simple and the market open.
That creates an unusual situation: the government may soon have a sophisticated tool to catch crypto tax evaders operating in a market where there may be no crypto tax to evade.
Law enforcement is also tightening its grip on privacy-focused cryptocurrencies — so-called “dark coins” that conceal transaction details.
The National Police Agency recently rolled out new rules requiring dedicated digital wallets, software-based storage systems, and stricter protocols for handling seized crypto assets.
A police official noted that storage methods have changed dramatically, from physical warehouses to managing wallet addresses and private keys.
Exchanges Face New Rules Starting In OctoberConsumer protections are getting an upgrade as well. Beginning in October, cryptocurrency exchanges operating in South Korea will be required to actively scan all transactions for signs of fraud.
The Financial Services Commission confirmed that exchanges must flag and freeze suspicious transfers, help victims recover lost funds, and share information about potential fraud with investigative agencies.
Featured image from Pexels, chart from TradingView
