[Korea finance act] ④Three Things Coin Investors Need to Know
[Korea finance act passes...What happens tot the market?] ④Three Things Coin Investors Need to Know With The act on Reporting and Use of certain financial transaction information(Korea Finance Act) on March 5, different parties explore the impact of the new rule. Followings are key questions from the passage. #1) Will opening a new account on Upbit be made possible? Many wonder if opening new accounts will be resumed. Currently, people can register and make transactions on Upbit, but transferring cash to the exchange’s bank account is not possible. This is because the government suspended the new issuing of virtual bank accounts for cryptocurrency trading on the exchanges in 2017. Therefore, the investors have to go via other exchanges, such as Gopax. That complex process generates unnecessary fees. The Industrial Bank of Korea, Upbit’s bank, remains reluctant to issue new accounts for the Upbit users, because the bank shoulders the responsibility for possible money laundering. The bank explained that the risk outweighs the benefit. Crypto exchanges are no longer responsible for money laundering issue. That could change when new ordinances are effective. Upbit is certified for information security management and manages bank accounts of members registered before the 2017 regulation came into effect. The head of the Korea Financial Intelligence Unit won’t turn down Upbit’s registration as a virtual asset business operator. #2) Is this good news for bitcoin prices? As the act worked its way through the system, crypto communities were optimistic as cryptocurrency is now under a regulatory framework. But recent bitcoin prices are determined by the ups and downs of global financial markets, not by the news about cryptocurrency regulation. Fears of global supply chain disruptions as a result of the Covid-19 outbreak spread around the world. Korea takes up a modest share in the global cryptocurrency market. According to CryptoCompare, the won accounts for 0.89 percent of the total. #3) Is taxation coming? The new rule can now serve as grounds for taxation for crypto trading. The Finance Ministry said that it will include a plan to tax cryptocurrency transactions in a reform bill scheduled to be submitted by July. If the bill passes at the National Assembly, then crypto investors have to pay tax next year. Still, it has yet to be decided how taxation will be calculated – specifically whether income from crypto trading will be categorized as miscellaneous income, transfer income or another type of gain. The details will likely be formulated in July.