The South Korean government has decided to tax profits on cryptocurrency trading, which could take effect from 2021.
Capital Gains Tax on Crypto Trading
According to a report from News Asia on Thursday (June 11, 2020), cryptocurrency traders in South Korea could be taxed capital gains on their crypto trading activities come 2021. This decision was made by the Ministry of Strategy and Finance after several deliberations.
The plan to tax crypto trading has been under consideration by the South Korean government. At the beginning of 2020, there were reports that the government was considering implementing a 20 percent crypto taxation on gains gotten from crypto trading and transactions. Later in May, the Ministry of Strategy and Finance also proposed imposing a tax on profits gotten from crypto transactions.
With the decision to tax crypto trading, a decision on the burden of reporting is now the next item on the agenda. According to an insider at South Korea’s Ministry of Information and Technology:
“In terms of the convenience of taxpayers’ reporting, it would be better to give the exchanges the responsibility to report transactions.”
With such a framework in place, crypto exchanges in the country will furnish South Korea’s tax agency with detailed information on its customer’s trading activities. Given the use of real-name accounts, capital gains tax will serve to improve the legal standing of the industry.
Some industry participants are already praising the move stating that it will serve to legalize South Korea’s crypto space. Speaking to News Asia, one local cryptocurrency investor quipped:
“It looks like from next year, we will see larger institutions being able to actually engage in crypto activities legally.”
What Next for Crypto and Blockchain in South Korea
South Korea’s crypto space has been through ups and downs, moving from a burgeoning market to coming on the brink of a total shutdown amid tightening government regulations.
The country’s Presidential Committee on the Fourth Industrial Revolution (PCFIR) earlier called on the South Korean government to introduce robust cryptocurrency regulations. These regulations will help to encourage crypto mainstream adoption. In March 2020, the South Korean National Assembly passed a bill that made bitcoin and crypto trading legal in the country.
On the blockchain side, the country has been making efforts to revamp the digital technology sector. Back in September 2019, South Korea’s blockchain sector was experiencing a decline as a result of stringent regulations. However, things could be changing for the digital industry as the government of South Korea is considering investing $400 million in blockchain research and development (R&D).
How Does the Future Look for Cryptocurrencies in the Financial Market?
The trading share of cryptocurrencies in the financial markets is getting bigger by the day, as professional and occasional investors redirect their funds from traditional assets to crypto coins. Billions of dollars, euros, pounds, and of other fiat currencies are used by traders, for the opening of new crypto trading positions, increasing crypto coin values, reputation, and market share. This is also one of the reasons, why new cryptocurrencies are regularly being launched. However, the supply of investment funds is not without limit, and on many occasions, it feels like a number of these new crypto coins are doomed for failure.
Today, cryptocurrency development stretches beyond its original creational limits, as even regulated institutions are investing in the creation of digital coins. These coins are generated to achieve collective wallet digitalization and consequently to gradually eliminate the need for cash. This, of course, is not something for which traders and investors care about, as their primary concern is how these assets will perform in the financial market. That being said, if a crypto asset is trusted and respected in the real world, then this will reflect on its performance in the world of finance. The problem is that for a cryptocurrency to earn the respect of the real economy, it will need to have enough time to mature.
Crypto Trading and Investment Challenges
Trading cryptocurrencies is not an easy task. There is a lot of research required, and there is a lot of work that needs to be done before opening a trading position. Experienced traders know that it is not something as fun and as easy as taking a spin on penny roulette, but those with less experience in crypto trading can end up facing heavy losses, just because they have not invested enough time to prepare for the worst-case scenario. Even though we have not seen any signs of a new cryptocurrency bubble burst for a long time, it does not mean that the threat is not there. This applies both to new cryptocurrencies as well as to those which the market categorizes as established.
Where Do We Go from There?
With a higher demand for digital monetary alternatives, it is only natural that countries, unions of nations, and Central Banks are looking towards finally regulating the crypto market. The regulation of such assets will set new standards for commerce and revolutionize the flow of money. It will, however, limit the profit potential of crypto coins, as it will no longer be possible for a cryptocurrency – whether it is new or old – to go from being worth peanuts to being worth as much as gold in a matter of hours.
👉Not being able to become rich overnight is bad news for those who dream of becoming wealthy through cryptocurrency trading, but it also comes with benefits. A regulated cryptocurrency market will discourage “dodgy trader” activity and reduce the risk of seeing toxicity forming in the crypto market. This will allow for the growth of crypto assets in a positively-charged environment, which will give them the time and stability they need to get to the same level of trust as that of traditional trading assets.
How Blockchain Can Help Your Business Grow
Ever since the introduction of Bitcoin in 2009, the world has changed the way it views fiat currencies and digital security. People were excited that they could finally transfer digital currency anywhere in the world without exaggerated banking fees or long hours.
The technology, however, proved so versatile that it has found its way into other uses as well. In 2020, there are so many businesses that use blockchain that we simply don’t have the time to enumerate them all in a single short article. But we will do our best to give you examples of ways the blockchain could potentially help you.
Hackers rarely sleep. That’s one statement that Sony forgot back in 2011. While it is unclear whether they now use the blockchain or not, many other companies have started implementing it with great results.
The encryption technology that the blockchain employs requires transactions and other processes to go through multiple nodes connected to the blockchain to get approval. This way, if a hacker attempts to do something malicious, the multiple nodes will eventually realize that fraud’s at stake and stop the transaction in its tracks.
More Payment Methods
People often think that the blockchain is meant solely for cryptocurrencies. That’s not true, at least not anymore. Banks all over the world have started implementing this tech to ease transaction times and lower processing fees.
Moreover, businesses that implement blockchain can use this technology to offer their customers multiple payment methods with seemingly endless currency options. One non-banking company that has proved the efficiency of this method is BetConstruct, offering more than 400 payment methods.
Through the blockchain, you can set up a reliable network of chatbots that can help out your customers.
With the help of the blockchain, these AI bots can easily communicate with one another and learn from each other based on what users respond, how they rate their satisfaction with the chat, and how customer support agents respond to users once the chatbot sends them their way.
Hire Better Employees
Small companies often don’t have the time or necessary resources to double-check the information in a CV. But with the help of the blockchain, you won’t need any of that.
Even today, there are still a lot of people seeking a job who ungracefully lie in their resumes. The blockchain can process all the data in a resume and send you the verified information to see if it’s legitimate.
Not only does this save you time, but it also means you’ll have hired the right person for your future projects. And we all know what having the right person can mean if you want your company to be successful.
Improve Your Marketing Campaigns
You’re probably aware of the usual marketing techniques like social media, video ads, billboards, SEO, SEM, and more. Look, you won’t need the blockchain to implement those tactics.
However, Blockchain can be used by marketers to keep track of client information and consumer behavior. With this data, skilled marketers can craft clever campaigns that bring greater ROI. You can also use the blockchain to track any changes made to your campaigns. If only David Ogilvy has had this tech at his disposal, who knows what he would’ve been able to craft.
👉🔥The Bottom Line
The blockchain has revolutionized businesses all around the globe the same way it has revolutionized the way people view money.
Implementing this technology for your business will net you tons of long-term benefits for an otherwise small investment considering all the things you’ll be getting.
Report: Q3 2020 Was The Best Quarter For DeFi
This week, Belgium’s Financial Services and Markets Authority made a startling revelation. Cryptocurrency fraud victims have lost at least €10 million between May 2019 and September 2020, the financial regulator said.
Belgians Have Lost €10 Million In Cryptocurrency Fraud
Belgian citizens have lost almost 10 million euros to fraudulent crypto investment schemes. Belgium’s apex financial authority, the Financial Services and Markets Authority, said on Monday. According to the watchdog, this data is from May 2019 to September 2020. Speaking about the modus operandi adopted by the scammers and crypto robbers, the FSMA said:
These platforms often use very aggressive methods to try to persuade you to invest ever larger sums. They will also try to persuade you to let them take control of your computer remotely so as to be able to make certain payments.
Adding to its statement, the regulator pointed out ‘fake advertisements that typically use images of celebrities.’ Potential victims get beguiled by platforms displaying these adverts circulating on social media. When interested folks click on them, cryptocurrency shysters call them to ‘to discuss an investment offer.’
Apart from bitcoin and other cryptocurrencies, online robbers offer investment schemes in foreign exchange products and contracts for differences (CFDs) that can be traded in markets with commodities and shares.
The FSMA had already apprised users about potential cryptocurrency frauds and scam-filled activities in 2018. Since then, it has added fake credit letters to its list of unscrupulous investment offerings. These the regulator said claim ‘to offer loans on favorable terms but intend to steal money.’ Also, investors need to stay away from fraudulent wealth management and alternative investment scams, FSMA mentioned.
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Is This Why The UK FCA Banned Crypto Derivatives For Retail Customers?
As per the latest update from the cryptocurrency scene in the UK, the country’s top financial watchdog, the Financial Conduct Authority (FCA), has banned the sale, marketing, and distribution of cryptocurrency derivatives and ETNs to retail customers effective January 6th, 2021.
The FCA enumerated several reasons to justify it’s latest banning move. Volatility in crypto prices, the so-called ‘lack of inherent value,’ and inadequate understanding of cryptocurrency systems are others. But the financial regulator also specified that ‘prevalence of market abuse and financial crime in the secondary market’ is why retail players should stay away from crypto derivatives.
Also, there is no legitimate need for retail customers to invest in these products, the FCA added. The most crucial question now is: Will these measures actually block the propagation of crypto fraud and scams? Will such a ban actually protect users?
In a world where fiat and traditional market scams are dominant and much more widespread than digital currency fraud, an outright ban on different crypto investment opportunities will only do so much. What is required is tightening law enforcement on scammers and the bad actors, which will eventually make crypto investment safe for users.
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