Crypto tax critical to Korean election: China crackdown continues

Transcript

Korea’s crypto attacks back on our minds today in the newsroom.

Welcome to The Daily Forkast October 15, 2021. I’m Angie Lau, Editor-in-Chief of Forkast.News, covering all things blockchain.

Korea’s much debated crypto tax has emerged as a critical factor in the country’s presidential election, slated for March of next year.

Now that’s pretty important if you think about it, because the next democratically elected leader of South Korea is going to be decided on crypto policy. And even more interesting, both leading candidates have argued that the imposition of the crypto tax set to take place in January should be delayed.

We’re going to talk about that and a whole lot more and why a whole bunch of young people are getting on board to vote. Coming up, let’s get you up to speed from Asia to the world.

First up, taxing crypto in South Korea is expected to be the critical factor in the upcoming presidential election next year.

Strong contenders from both political parties are saying the crypto tax should be pushed back. And why is that? Well, they’re eager to secure the votes of the 20 and 30 year olds, which make up 26% of the 51 million population of South Korea.

They are, after all, the future and how they vote could decide on the future of crypto in South Korea.

Forkast.News Danny Park reports.

Many investors are strongly opposed to the crypto tax, saying it is unfair as the threshold for stock gains is 50 million won, while it is only 2.5 Million won for crypto.

Moreover, the crypto tax is counted from January, while stock gains will not be taxed until 2023.

In response, lawmakers from both the ruling and opposition parties have spoken out, with several spearheading bills to push the start date back. According to various media outlets, both parties want to earn the votes of those in their 20s and 30s ahead of the presidential election in March.

Around 60% of Korean crypto investors fall into that age range with their stake in virtual asset investments much higher than that of other age groups.

Back in May, Lee Jae-myung — the presidential candidate for the Democratic Party said the crypto tax should be applied fairly with stock gains tax. While Hong Joon-pyo, a member of the Conservative Party who announced his running for the election, also recently criticized the tax policy on his Facebook page. But is there really a chance for postponing the crypto tax?

“Both the ruling and the position party are asking for deferral and alleviation of tax on virtual assets. So I believe there is a good chance for the tax law to actually be pushed back. Furthermore, it coincides with the [presidential] election next year. Of course there’s the bigger problem with fair taxation but on top of that, there’s the election. So both parties will not do anything at risk of losing votes.”

Professor Cha also added that the four years of building tax infrastructure for virtual assets is far from enough, given it took the authorities 17 years to build a tax law for listed stocks.

For Forkast.News, I’m Danny Park.

Meanwhile, China’s crypto mining crackdown continues.

This time, the finger is being pointed at those using public resources to mine. The Cyberspace Administration of Zhejiang says an investigation identified 184 IP addresses associated with 77 public entities that they suspect of using public resources to mine cryptocurrencies.

Now, as you’ve learned through our coverage at Forkast, China is not playing around when it comes to policy enforcement.

Forkast.News Timmy Shen has more.

Authorities in the eastern province of Zhejiang began their investigations in early September, aiming to crack down on those using public resources and state agencies, state owned enterprises and schools to mine cryptocurrencies. On site inspections later confirmed that 119 IP addresses from 20 public entities engaged in mining cryptos, including Bitcoin and Ether.

And it’s not just Zhejiang province that is carrying out such inspections. Earlier this month, the eastern province of Jiangsu said it identified just over 4,500 IP addresses that were involved with mining, with a total hashing power surpassing 10 petahashes per second.

Authorities there said that involved power consumption of around 260,000 kilowatt hours per day.

Meanwhile, BTC.com has announced it is exiting the Chinese mainland market. The world’s sixth largest bitcoin mining pool in terms of hashrate made a statement saying it is doing so to abide by the latest regulatory requirements of the government and the mining services in mainland China will be shut down in an orderly manner from October 15th.

It also urged mainland Chinese users to relocate computing power elsewhere and withdraw relevant assets.

For Forkast.News, I’m Timmy Shen — Taipei, Taiwan.

And finally, while China’s crypto mining crackdown is showing no signs of letting up, rollout of the e-CNY continues to pick up the pace.

According to the China Civil Aviation Newspaper, Beijing Capital Airport is the first in the country to accept the digital yuan, with payment for parking spaces and purchases at over 100 stores.

The latest move forms part of the plans for next February’s Winter Olympics CBDC pilot. Now, the Games will be the first international test of the digital yuan, with tens of thousands of athletes from around the world set to participate.

Just last month, the deputy governor of the People’s Bank of China, Fan Yifei said the Winter Olympics pilot had hit the sprint stage as it approaches the finishing line.

The city of Beijing is also promoting the e-CNY, with passengers able to receive coupons for rides on the subway system as long as they have their own digital RMB wallet.

With a population of 22 million living in that city alone, that could prove an unprecedented large scale test for the CBDC.

Of course, we’re going to be watching to see whether they cross that line in style or stumble at the last minute. Either way, they’re headed for the finish line. Stay tuned.

And that’s The Daily Forkast from our vantage point right here in Asia. Hit like, hit subscribe — we always appreciate your help in helping us reach our goal of more subscribers and to reach more of you.

For more, visit Forkast.News. I’m Editor-in-Chief Angie Lau. Until the next time.