South Korea‘s finance ministry might be planning to impose a 20 percent tax on income gained from cryptocurrency transactions, according to a recent Korea Herald report. The report quoted a government official as saying that while the finance ministry has not finalized its plan to tax cryptocurrencies yet, there is a possibility that the government might impose a 20 percent tax on cryptocurrencies.
According to the same, South Korea’s Ministry of Economy and Finance, after having recently reviewed the country’s tax plan, has now ordered the country’s income tax officials to carry out a review of the taxation plan for cryptocurrencies.
Such a development suggests that the government might categorize profits from cryptocurrency trading as ‘other income,’ and not as ‘capital gains.’ If finalized as ‘other income,’ the Korean tax authority, the National Tax Service (NTS), would be able to tax crypto-gains. However, this isn’t the first time South Korea has considered plans for taxing crypto-gains.
The official said,
“The finance ministry is yet to finalize its direction but it surely has become more likely for the income from virtual asset trading to be labeled as other income, not as gains from transfer of capitals like real estate properties.”
The NTS has already initiated the process of labeling gains earned by foreigners from crypto-trading as ‘other income’ and has also collected taxes indirectly through crypto-exchanges. Previously in December 2019, Bithumb, one of South Korea’s leading crypto-exchanges, was hit by a $70 million tax bill for withholding taxes on trading activities by foreign customers. At the moment, Bithumb is fighting to nullify the tax bill presented to it.
This development is more evidence of the government’s pro-active involvement in the digital assets industry. Just two weeks ago, the South Korean Presidential Office’s 4th Industrial Revolution Commission recommended allowing financial institutions in the country to launch cryptocurrency-related services like Bitcoin derivatives in the country.
RUSSIA’S RICHEST MAN IS LAUNCHING HIS OWN CRYPTO TOKEN
- Oligarch Brings Blockchain to the Masses
- Atomyze Crypto Tokens Will Be Available in US, Switzerland
- Who is Vladimir Potanin?
Billionaire Vladimir Potanin has received approval from the Russian central bank to launch his own blockchain-based platform and token to be used by consumers, Bloomberg reports.
OLIGARCH BRINGS BLOCKCHAIN TO THE MASSES
Vladimir Potanin, who recently became the richest man in Russia as per Forbes, wants to expand his blockchain platform by launching his own crypto token. The digital units will allow clients to buy metals, air tickets, and transfer ski passes from his businesses.
Ironically, the news comes days after we reported that FSB, Russia’s version of FBI, sided with the central bank to potentially ban cryptocurrency’s status as a means of payment.
Potanin voiced his intentions to develop crypto tokens on several occasions. He wanted to help clients buy metals with tokens without any friction. Now he can advance with his plans after obtaining the green light from the Bank of Russia.
The goal of the platform is to cut paperwork and middlemen, as well as speed up transaction time.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
He told Bloomberg:
To some extent Russia appears ahead of many other jurisdictions in terms of digitalization. The central bank gave us a very wide mandate.
ATOMYZE CRYPTO TOKENS WILL BE AVAILABLE IN US, SWITZERLAND
Potanin’s blockchain platform, called Atomyze, will also be present in Switzerland and the US, but it will be available only to institutional clients there.
Atomyze is about to go live by the end of 2020, once the Russian law on digital financial assets passes through the State Duma and comes into force.
Potanin says that his tokens would have a great impact on metals. His nickel and palladium mining giant, Norilsk Nickel, will be the first to trial the tokens backed by palladium, copper, and cobalt. Other companies testing the platform include Traxys SA, Trafigura Group, and Umicore SA. Norilsk Nickel, which is the world’s largest palladium producer, will be the first to issue Potanin’s tokens.
Atomyze, which is based in Zug, Switzerland, has developed its platform based on Hyperledger Fabric’s blockchain and is currently in trial mode. CEO Marco Grossi explained:
The main idea of tokenization is not in buying or trading cryptocurrencies; it lies in the creation of a modern and transparent mechanism for digitizing of assets, and in the creation of new digital markets, where tokenization is a service helping issuers transfer rights to their assets into a digital form.
According to Potanin, the platform might encourage other Russian corporate giants to seek approval for similar blockchain-oriented projects. He revealed that the central bank tested Atomyze for about four months.
“Our project is of great importance for the economy because the easier new products are offered, the faster they are produced,” he stated.
WHO IS VLADIMIR POTANIN?
Potanin is a billionaire and oligarch who is currently worth $27.7 billion according to Forbes, being the richest man in Russia at the time of writing.
He acquired a stake in Norilsk Nickel, the company that he currently heads, during the privatization period back in 1995. He co-founded Onexim Bank, and currently owns stakes in ski resort Rosa Khutor and Petrovax Pharm.
Before Russian President Vladimir Putin came to power, the country’s politics and economy were heavily influenced and sometimes even controlled by a group of seven oligarchs often referred to as the seven bankers, which included Potanin. The group collaborated to re-elect former President Boris Yeltsin in 1996, and thereafter to manipulate him directly or from behind the scenes.
Other members of the group were Boris Berezovsky, who was the most prominent figure of the group, Mikhail Khodorkovsky, who should be paid $50 billion by Russia according to a recent decision by a Dutch court, Mikhail Fridman, and Vladimir Gusinsky, among others.
CRYPTO EXCHANGE EXEC: BITCOIN WILL NOT STOP AT $100,000
Bitcoin is holding on to gains today as the threat of a larger correction looms. The long term outlook is extremely bullish though, at least according to one crypto exchange executive.
KRAKEN DIRECTOR ON $100K BITCOIN
Kraken’s director of business development, Dan Held, sat down with Nuggets News CEO Alex Saunders to discuss global markets, why bitcoin is the hardest money, and how it fits into the macroeconomic system.
Held got into BTC in 2012 after learning about the financial system crash in 2008. He added that it was a tiny space back then and no major players in tech wanted to get involved in crypto.
He said that the scene now is so much different with many different products and institutional involvement. This could spur a ‘super cycle’ with a lot more fiat flowing in which would take bitcoin prices to $100k in no time.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
At the moment there is such a small amount relatively with total market cap hovering around $275 billion which is smaller than some US tech giants.
Host Saunders added that the floodgates could open when there are trillions of newly printed dollars entering financial markets when there are negative interest rates.
Held continued to say that when price goes up more people talk about BTC and it gets more mainstream media coverage which adds to the FOMO.
On the negative side it was mentioned that there has been concern over a possible crackdown in the US from bankers and politicians that view it as a threat to their own monetary system.
Hodlers have some of their net worth in bitcoin so if a government bans it they’re damaging that percentage of people that are holding it and potentially losing support when enough people do hold it.
He added that one of the best moments of 2019 for him was when the Chair of the US Federal Reserve, Jerome Powell, said that bitcoin was a speculative store of value.
“Bitcoin is now recognized as a valid contender for store of value by the most powerful financial institution in the world.”
Held said he couldn’t be more bullish and that things haven’t yet really begun in terms of major investment and inflow.
In terms of macroeconomics Held said he has waited seven years for this moment with the president of the US tweeting at the FED to print more money. He called it a race to zero with investors looking where to put their money while household debt skyrockets and savers are getting punished.
It is all good gravy for bitcoin and this one industry executive is more bullish than ever.
CoolBitX Raises $16.7M to Make Crypto More Bank-Friendly
Asian companies are accelerating the crypto industry’s push to make exchanges work more like traditional banks.
The crypto wallet and security startup CoolBitX raised $16.7 million in a round led by Japanese financial group SBI Holdings, with participation from the National Development Fund of Taiwan, Korean crypto exchange BitSonic and Japanese financial firm Monex. In 2020, the startup’s focus is on new products and features that comply with new rules from the Financial Action Task Force (FATF) that require businesses to collect and pass information about customers when transferring funds between firms.
Several Asian countries, including Singapore, South Korea and Japan, swiftly responded to the token boom of 2017 with regulatory proposals and enforcement. As such, crypto companies in these regions must follow strict anti-money laundering (AML) and know-your-customer (KYC) procedures. CoolBitX CEO Michael Ou argued in a 2019 column that many countries in the region now have a more mature crypto industry than North America’s.
“We believed it was necessary to be ahead of the regulatory curve and have a solution in place in anticipation of stricter AML regulations from the South Korean government,” said BitSonic CEO Jinwook Shin. “In the coming months, the South Korean government is expected to pass regulations that will change the country’s cryptocurrency landscape and this investment [in CoolBitX] allows us to be on top of these regulations.”
Underscoring that same point about professional exchange guidelines, Monex Group CEO Oki Matsumoto said in a press statement that as a cryptocurrency exchange owner, he sees “huge potential in CoolBitX” to promote the “proper adoption of virtual assets” in a fair yet robust industry.
“We continue to closely monitor regulatory developments around the world in order to roll out each product or service to as broad a market as possible,” said CoolBitX international manager Elsa Madrolle, an alum of derivatives exchange CME Group. “Our plans are ultimately to expand globally.”
Madrolle added that she expects cryptocurrency exchanges to soon have experiences that “resemble how people transfer money electronically using a digital bank.” Shin added that his exchange is working with CoolBitX to “demonstrate our commitment to compliance and willingness to work hand-in-hand with the government.”
If Asian markets offer a harbinger of industry norms, then future fiat on-ramps and cryptocurrency custody products will fall in line with digital banking norms. Madrolle said it’s too soon to know how such regulations will impact the startup’s hardware wallet, but she doesn’t expect future features to hinder or inconvenience retail users.
“FATF-compliant regulation should help draw attention to cryptocurrency as a valid asset class and create more comfort for bigger institutions to consider investing,” she said.