Market Snapshot – South Korean Authorities to Tax Exchanges

The entire crypto industry was reeling under the fear of a crackdown from the South Korea regulators last week as there were reports of witchhunts, threats of total shutdown of exchanges and all other stories that were emanating from there though the authorities refused to say anything than to just say that they are looking into the situation and had not made a decision as yet.

Today, they are reports that the authorities have announced a 24.2% tax on the crypto exchanges out of the profits that they make. Though this could affect the industry in a temporary manner as the exchanges look to pass on this effect to its customers, in tthe long run, this is likely to be termed as a hawkish development as it almost confirms that there would not be any shutdown of the exchanges in the short and medium term. So, the worst fears are gone for now and we should see the crypto industry benefit from this in the medium term.

Taxes In Line With Other Industries

The taxes that have been announced are in line with the normal corporate taxes that are prevalent in South Korea. Also, this is in line with the crackdown on the exchanges from the South Korean authorities. They have blocked the use of anonymous accounts and also forbidden foreign persons and entities from opening accounts in the exchanges.

Though this move is likely to affect the market temporarily and lead the prices lower, we believe that these measures are a sign of the market maturing in the medium term and hence should attract larger investors and traders. It would also remove the uncertainty that has been hanging around the markets for the past week or so and lay down the guidelines which the authorities from other countries are also likely to take a cue from. Hence, these should be bullish for the crypto industry in the medium term and lead the prices higher during this period.