Cryptocurrency exchanges in South Korea faced the dreaded government hammer last week, as the authorities decided to exclude the burgeoning business type from the country’s “Venture Company” certification, reportedBusiness Korea on Oct.1.
The certification provides small and medium businesses with tax breaks, relaxed government policies, and privileged support for raising funds and acquiring lines of credits. Millions of companies in the country have enjoyed the myriad benefits of the act, and while South Korea looks to relax norms for cryptocurrency businesses, the recent move is limiting in nature.
Cryptocurrency exchanges will now face a 100 percent increase in income and corporate tax–up from 12.5 percent to 25 percent–and cannot benefit from more than a 75 percent cut in acquisition tax. Moreover, credit guarantees offered by national banks will now disappear.
The development was brought into effect immediately upon announcement on Oct. 1. All existing exchanges holding the certificate–such as Bithumb, UPBit, and Coinone–cannot reapply for the certification after expiry. For most, the licenses are valid until the end of 2018.