News Bad news for Bithumb: Government slams Korean exchange with...

Bad news for Bithumb: Government slams Korean exchange with massive surprise tax


- Advertisment -

Arguably the worst year for South Korea’s crypto exchange market just got even worse. The National Tax Service just told Bithumb, South Korea’s second-biggest cryptocurrency trading platform, to pay $67 million in additional taxes.

The regulatory agency ordered Bithumb was to pay the extra tax to cover withdrawals it processed for foreign users, according to reports from local mainstream media outlets

“This is significant as Bithumb, like many other Korean exchanges, is suffering from loss right now. The exchange had a net loss of $180 million in 2018 according to an article by the Korea Times,” said Doo Wan Nam, an associate for South Korea business development at MakerDAO.

The National Tax Service said that Bithumb failed to withhold taxes from foreign users that traded on its platform. It argued Bithumb has to pay the $67 million first, and then it can ask its foreign users to pay taxes for their previous trades directly to the exchange.

An impossible request

However, it’s functionally impossible for Bithumb to tax foreign users, who may or may not be based in South Korea. In response, Bithumb said it plans to take legal action to fight the request.

The controversy around the National Tax Service’s request is not about the amount, nor Bithumb itself. Instead, it centers around the lack of clear taxation policies and guidelines for both cryptocurrency exchanges and investors in South Korea.

Industry experts said that the tax agency cannot request additional tax payments when there is no regulatory framework in place to tax cryptocurrency trades in the first place.

One expert who asked for anonymity told Hankyung that if the National Tax Service “wants to impose taxes on cryptocurrency trading legally, the government of South Korea has to first make changes to the income tax law and give legal status to cryptocurrency.”

Many local experts and industry executives agree that the request cannot be justified since it sets a bad precedent for the cryptocurrency sector.

A bill outlining a regulatory framework aimed at cryptocurrency exchanges and service providers passed South Korea’s Parliamentary Affairs Committee on November 25. It’s awaiting final approval from the Congress. However, though the bill is considered to be a crucial step in the legalization process of cryptocurrencies in South Korea, it did not clarify taxation policy for local and foreign cryptocurrency investors.



Please enter your comment!
Please enter your name here

Latest news

Yield Farming Program “Volcano” Kicks off Dutch Auction for Cryptokitties KittieFIGHT Game

In the fall of 2017, along with the rallying of Bitcoin and other digital assets, Cryptokitties dominated...

Ministry of Foreign Affairs of Denmark may use Blockchain to tackle corruption

We have already moved to the stage in our lives where technology plays an important role in...

What Lessons Can The World Learn From Venezuela’s Newfound Love For Crypto?

It is often the case that great changes are forced out of necessity, rather than a willingness...

How Bitcoin Capitalization Affected In 2020 on the Quarantine Background

Although the weeks of quarantining are gradually easing off, the impact of dealing with the deadly coronavirus...
- Advertisement -

Seamless Crypto Exchange HolyTransaction Allows Gridcoin Staking

In today’s world, the time value of money is very important and everyone likes to earn a...

How to Use Big Data Analytics Against Rising Cyber Security Attacks?

Big data and big data analytics have many implications across verticals. The use cases range from optimizing...

Must read

- Advertisement -

Read Next
Recommended to you