South Korea Announces 22% Crypto Tax Amid Sharp Drop in Domestic Trading Volume
South Korean officials confirmed a new 22% tax on cryptocurrency gains, set to take effect in 2027. The policy is part of the Income Tax Act and applies to annual profits exceeding KRW 2.5 million ($1,740), with returns due by May 2028. This announcement comes amid a significant decline in trading volume on South Korea’s five major exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—which saw combined first-half trading volumes drop nearly 55% compared to the same period in 2025. Critics argue that the tax could drive traders offshore or toward decentralized platforms. Lawmakers have also proposed a bill seeking to remove crypto income from taxation entirely, though it remains under review. The decline in volume has led to increased market concentration, with Upbit gaining share at Bithumb’s expense as smaller exchanges explore partnerships and restructuring options. The government acknowledges concerns but maintains the tax is necessary for regulatory clarity.
Topics: cryptocurrency government_regulation taxation trading_volume