Crypto regulations serve just one key purpose: regulating the crypto sector and eliminating scams, hacks, and other malicious activities. While so many countries have had tough accepting crypto and making a helpful regulation, others have had smooth sailing.
But without law and order comes disorderliness. That is why the South Korean regulator has announced a new update regarding crypto startups in the country. In the released report, the crypto regulation that would govern exchanges has been updated. According to the new law that would be rolled out from March 25, crypto-related businesses must always report their financial activities across South Korea.
Startups are given six-month grace to comply
In the report that was compiled and reported by local media, JongAng Daily, the update on the rule means that all crypto-related businesses in the country should henceforth submit a copy of their financial records. The regulations buttress that the investments should endure that they file the correct financial records with its anti-money laundering outfit, the country’s Financial Intelligence Unit.
According to the regulators, start-ups are being allowed up a grace period of up to six months, and if they fail to do so, they will face the wrath of the law. The rule states that if startups fail to comply, they would be slammed with a fine of $44,000. If they can’t pay the fine, then the major members making up the startups would spend up to five years in jail. This regulation above is just one of the new regulations rolled out by the Financial Services Commission of South Korea.
New regulations would kick in by January 2022
South Koreans know that its regulators don’t joke with their laws as they have seen that the law would take its course. Buttressing the statement above, a recent announcement made by the National Tax Service pointed out that it now has the details of close to 2,400 individuals who have evaded tax while using digital assets to hold cash.
The country has also mentioned that its tax on crypto holdings would be in the works now and is expected to be enforced by January 2022. The law would see entities and individuals pay about 20% on gains reported from crypto, while a profit of $2,300 will attract capital gains tax.
At an event that took place towards the end of last year, enthusiasts across South Korea waded in on the regulation while noting that it would open the door for them to participate in trading in the DeFi sector. To ensure that the rules are promptly followed, the digital service provider is aiming to roll out strict measures of identification. With this, all transactions that deal with heavy amounts would be flagged and investigated promptly.