Figures reported by Yonhap news today, indicated that crypto exchanges in South Korea generated a staggering revenue of $648 million in 2017. Not only does this show the power of South Korea in the crypto world, but it also represents an enormous gain on 2016, when the reported revenue was $7 million.
But it’s Not for Keeps
While this is a massive financial achievement, the exchanges won’t be banking all the cash. Since January this year, legislation in South Korea has dictated that this income is taxable, just the same as any traditional income. The exchanges have until March 2018 to pay corporate tax, and a month later to settle local income tax. And it’s Upbit who will be hit with the largest tax bill. The massive exchange accounted for just over half of the entire figure, with Bithumb, Coinone and Korbit also set to fork out eye-watering sums.
The law set out by South Korean policymakers states that just under 25% of this revenue will go to tax, meaning that the government pockets are set to deepen by over $150 million. This should be enough to sweeten the deal as they maintain their open policy on crypto trading, as opposed to other countries, such as China, who have been cracking down of late. It would be an extraordinary achievement if 2018 was to see even higher revenue generated, especially since the market cap slump of early 2018. But with the continuing moves into the mainstream, led by Bitcoin and Ethereum, it would take a brave soul to bet against it.