Key Takeaways
- • South Korea is preparing to impose a 22% tax on crypto profits starting January 2027, but major crypto exchanges have requested a postponement, with a proposal potentially pushing the rollout to 2029.
- • Democratic Party of Korea lawmaker Park Min-gyu introduced a bill to defer the tax until Jan. 1 of the second year after South Korea begins sharing data under the OECD's Crypto-Asset Reporting Framework (CARF), which would place the start of taxation in 2029.
- • South Korea's five major crypto exchanges averaged 597.8 billion won ($406.5 million) in daily trading volume in July 2026, with Upbit and Bithumb accounting for over 90% of domestic exchange volume, according to Yonhap.
- • A Seoul Economic Daily survey of 30 industry experts found 93.3% favor postponing the tax and 86.7% expect trading volumes on major exchanges to decline if it is implemented as proposed.
- • The government is set to meet exchange executives to discuss the issue, but a postponement remains a proposal and has not been finalized.
Summary
South Korea is preparing to impose a 22% tax on crypto profits in January 2027, but top crypto exchanges have requested another postponement. According to a recent Yonhap News Agency report, standards for different transaction types have not yet been finalized, and time is running short for practical preparations on the infrastructure side. There is a shared view among industry participants in favor of postponing the start of taxation. The government is now set to meet exchange executives to discuss the issue, with a new proposal potentially pushing the rollout to 2029.
On Friday, Democratic Party of Korea lawmaker Park Min-gyu introduced a bill seeking to defer the tax until Jan. 1 of the second year after South Korea begins sharing data under the OECD's Crypto-Asset Reporting Framework (CARF). With the first exchange of data expected in 2027, taxation would begin in 2029. The postponement, however, remains only a proposal.
The decision carries weight because South Korea is a major crypto trading center. According to Yonhap, the country's five major crypto exchanges had a daily average of 597.8 billion won ($406.5 million) in trading volume in July 2026, with Upbit and Bithumb accounting for over 90% of domestic exchange volume. A survey of 30 industry experts by the Seoul Economic Daily found that 93.3% would like to postpone the new tax, and 86.7% believe trading volumes on major exchanges will decline if the tax is implemented as proposed.
Analysts warn that the tax could shift activity offshore. Park Sung-jae, an analyst at Shinhan Securities, said investments are being shifted to overseas exchanges such as Binance, which offer a variety of investment formats, including futures and leverage, with spot trading being the only de facto option domestically. A delay to 2029 would provide crypto exchanges with much-needed relief. If the tax takes effect in 2027 as proposed, increased compliance costs may dampen trading activity and capital inflows, while additional postponements would create uncertainty for the industry. Either way, the outcome could affect sentiment and capital flows in one of Asia's key crypto markets.
On Friday, Democratic Party of Korea lawmaker Park Min-gyu introduced a bill seeking to defer the tax until Jan. 1 of the second year after South Korea begins sharing data under the OECD's Crypto-Asset Reporting Framework (CARF). With the first exchange of data expected in 2027, taxation would begin in 2029. The postponement, however, remains only a proposal.
The decision carries weight because South Korea is a major crypto trading center. According to Yonhap, the country's five major crypto exchanges had a daily average of 597.8 billion won ($406.5 million) in trading volume in July 2026, with Upbit and Bithumb accounting for over 90% of domestic exchange volume. A survey of 30 industry experts by the Seoul Economic Daily found that 93.3% would like to postpone the new tax, and 86.7% believe trading volumes on major exchanges will decline if the tax is implemented as proposed.
Analysts warn that the tax could shift activity offshore. Park Sung-jae, an analyst at Shinhan Securities, said investments are being shifted to overseas exchanges such as Binance, which offer a variety of investment formats, including futures and leverage, with spot trading being the only de facto option domestically. A delay to 2029 would provide crypto exchanges with much-needed relief. If the tax takes effect in 2027 as proposed, increased compliance costs may dampen trading activity and capital inflows, while additional postponements would create uncertainty for the industry. Either way, the outcome could affect sentiment and capital flows in one of Asia's key crypto markets.
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