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South Korea promises tax-free cryptos and ICO legalization

 


South Korea's newly elected President Yoon Suk-yeol will become president in May. He is a strong supporter of crypto and reviews the ban on ICOs. He also owns his own NFTs. Among other things, he promised a tax cut on crypto and the approval of Initial Coin Offerings (ICOs), where investors can buy the first coins of a project, reports Nikkei Asia. Will South Korea be the new bitcoin paradise?


As a member of the conservative People Power Party, in addition to approving ICOs, Yoon also pledged not to tax profits from cryptocurrency trading. This would apply up to an amount of 50 million won (£38,337). This way, crypto gains are calculated in the same way as stock gains.


Bitcoin tax in South Korea

South Korea's new president is particularly popular with crypto owners because of certain campaign promises. For example, he promises to raise the limit of tax-free crypto assets from $2,000 to $40,000. A nice bonus for many South Korean owners of Bitcoin or other cryptocurrencies. This promise would make South Korea the largest crypto tax haven in the world.


In addition, South Korea's new president is exploring ways to reverse the ban on Initial Coin Offerings (ICOs). A step that caused a lot of division in the country. Due to the many scams, ICOs were banned in South Korea in 2017. An ICO is a form of crowdfunding to raise capital with cryptocurrencies. They buy digital tokens in the hope that the project will be successful and its demand and value will increase in the future. Very risky as the project will not start until the funding goal is met.


Ban on ICOs

With the current ICO ban and tax-free profits changing to $36,650, crypto investors have plenty to get excited about. South Korean crypto startups no longer need to move to countries like Singapore if they want to organize an ICO.


“With ICOs now banned, we have no choice but to issue coins in Singapore and other countries. Ventures and startups will be able to easily raise funds from investors when the ban is lifted,” said the secretary-general of the Korea Blockchain Association.


Coins surged following the loss of the current President

Suk-yeol, 61, campaigned strategically and targeted young voters during the election. He's big on non-fungible tokens and even launched his own collection of NFTs during his campaign. Victory was a historic neck-and-neck race. Suk-yeol defeated his Democratic rival by a minimal margin.


South Korean currencies surged after President's gains. The current president, Moon Jae-In, took a hard line against crypto exchanges. South Koreans were no longer allowed to accept them as customers from September 2021. In addition, there was practically no clarity about the crypto tax. That will now change if we are to believe Yoon's promises.


The support of the Democratic Party is crucial

However, these plans can still be interrupted. That's because, according to news outlet Nikkei Asai, multiple parties need to agree:


“Yoon can implement some of its cryptocurrency policies, but its 'no taxes' pledge requires the National Assembly to review a tax bill. Lawmakers must also pass a bill to create an agency to regulate digital assets.”


The news platform says that this requires the cooperation of the current president’s Democratic Party, who was therefore not that big of a crypto fan. This party has a majority of 300 seats in the legislature.


Are promises kept?

Crypto news was boosted by Yoon's gains. But whether his promises will come true depends on several factors. The enthusiasm was reflected in crypto prices, including South Korea's ICON (ICX), which surged 60% in the hours following the election. However, this could go the other way if third parties thwart Yoon's plans. Starting in May, when Yoon joins, we will learn more about this crypto president's promises.

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