- South Koreans own more crypto than other asset classes abroad.
- A recent report revealed billions worth of crypto assets held in overseas accounts.
- The revelation comes amidst tightening domestic and international crypto regulation in the country.
South Korea’s crypto surge has surprised many as recent data insights from the country’s taxman reveal that cryptocurrencies account for over 70% of all reported overseas assets.
The revelation comes after South Korea’s Financial Services Commission (FSC) announced on July 11 that the government was working on legislation that would foster “clear and transparent accounting and disclosure” of virtual asset transactions.
Taxpayers Declare Billions in Crypto Assets
While the South Korean government may tentatively implement taxes on crypto earnings by 2025, the country recently amended its tax law, mandating taxpayers to declare if they possess over 500 million won in overseas assets.
According to a September 20 report by the National Tax Service (NTS) of South Korea, for the first time, 1,432 individuals and corporations have declared possessing crypto accounts overseas, holding 186.4 trillion won ($99 billion) in digital assets.
Per the NTS report, many South Koreans prefer the U.S. as the top destination for opening overseas accounts, followed by Singapore and Hong Kong, while entities opted for the U.S., Japan, and Britain, in that order.
The amount of money held in crypto abroad by South Koreans underscores the rising influence of digital assets on the nation’s wealth portfolio. This trend has caught the government’s attention, prompting it to tighten its domestic digital assets regime and reporting requirements.
Tightening Domestic Crypto Regulation
Per the July 11 announcement by the FSC, the commission will introduce new accounting rules soon to regulate how domestic companies declare their crypto holdings beginning in 2024.
South Korean lawmakers also adopted 19 bills in June, which, if passed, would mandate the Financial Services Commission and the Bank of Korea to regulate crypto operators and asset custodians.
Read why South Korea froze North’s crypto:
Crypto Cold War: South Korea Moves to Freeze North’s Crypto
Stay updated on how a South Korean bank aims to boost the digital assets market:
South Korean Bank to Work With BitGo to Expand Digital Assets Market