South Korea’s Ministry of Economy and Finance is reportedly in the process of drawing up a revised bill to tax cryptocurrency transactions by the first half of 2020.
Meanwhile, a related bill on cryptocurrency trading is being prepared by the National Assembly. The bill would take effect one year after the Assembly meets and votes to pass it into law.
The bill to tax cryptocurrency transactions is all but certain to pass into law, but will require a more adequate definition of cryptocurrencies and digital assets, according to The Korea Times.
Other matters which need to be clarified include the question of whether gains in cryptocurrency transactions are similar to gains in other assets, such as stocks or real estate.
The South Korean government will also have to obtain access to trading records on cryptocurrency exchanges before it implements taxation plans.
Similarly, the United States is in the process of accessing records of cryptocurrency transactions in a move toward regulating the digital asset.
Additionally, The National Assembly’s revised bill suggests that banks must issue real-name accounts to crypto exchanges to ensure that they comply with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) standards applied to traditional financial institutions.
The new bill, or the proposed Act on Reporting and Use of Certain Financial Transaction Information, is considered a move to bring cryptocurrency exchanges under the direct regulation of the Financial Services Commission — South Korea’s financial watchdog.
The country will also introduce a crypto exchange licensing system to prevent money laundering and bring South Korea’s crypto regulation on par with other countries.