Solution for Taxation on Investors
The South Korean government recently decided to impose a capital gains tax on profits derived from virtual currency trading. Still, the government has to solve various things in order to do so, including how to access trading information. The financial authorities are already studying various methods to be capable of doing so.
The government is planning to release guidelines late this month on the prevention of money laundering related to virtual currencies. The guidelines are expected to include mandatory trading history storage at banks by virtual currency exchanges.
At present, each bank in South Korea is required to verify the names of their customers and report suspicious transactions. On the contrary, virtual currency exchanges in the country are currently free from the obligation. Laws have to be revised for the exchanges to be covered by the obligation, but the revision of the laws has yet to be discussed with relevant government arms.
Nonetheless, the virtual currency exchanges are customers of the banks and the banks have to prevent money laundering and can check whether the exchanges properly manage the trading histories of virtual currency traders. The exchanges cannot but follow the financial authorities’ guidelines as they can do business only via the banks. Under the circumstances, the government is expected to identify those sending money to and from the exchanges by using name ID systems and access their trading histories based on the guidelines.