South Korea Considers Scrapping Crypto Tax

Petition Clears the 50,000-Signature Threshold

South Korean lawmakers are now required to formally review a proposal to scrap the country's planned crypto tax, after a national petition crossed the 50,000-signature threshold in just eight days. The petition, calling for scrapping or revising the tax, has crossed 50,000 signatures and now sits above 52,000, triggering the Finance and Economic Planning Committee to consider objections to the new framework.

South Korea's planned 22% tax on crypto investment gains is set to take effect in January 2027. The country initially planned to impose the levy starting in 2021, but backlash from industry stakeholders and concerns about its impact on investors led to repeated delays, with implementation pushed first to 2023, then to 2025, and now to 2027.

Supporters of the petition argue the tax treats crypto investors unfairly. The petition's authors argue that taxing crypto gains at 22% while granting other asset classes preferential treatment undermines Korea's competitiveness in the global crypto market. The disparity with stock investors is a central grievance: stock market investors in South Korea face capital gains taxation only on profits exceeding 50 million won, a threshold far more generous than what crypto holders would face.

Market Decline Adds Pressure on Policymakers

The petition arrives against a backdrop of declining activity in South Korea's crypto markets. The total value of crypto held by South Koreans declined from about 121.8 trillion won ($83.3 billion) in January 2025 to about 60.6 trillion won ($41.4 billion) in February 2026, according to industry data. Daily trading volumes on the five largest crypto exchanges, which include Upbit, Bithumb, Coinone, Korbit and Gopax, also fell from $11.6 billion in December 2024 to just $3 billion in February.

Tighter regulation is compounding concerns. In March, South Korea's Financial Services Commission and the Financial Intelligence Unit proposed that all crypto transactions above 10 million won ($6,630) sent to or from foreign crypto wallets should be automatically flagged as suspicious. Critics argue these measures, combined with the proposed tax, risk pushing capital and talent toward friendlier jurisdictions.

Despite the public pressure, a formal review does not guarantee any change in law. The committee stage requires lawmakers to formally discuss the petition's demands, hear arguments, and decide whether to advance legislative action, with outcomes ranging from recommending a full vote to shelving the petition after discussion. A previous crypto tax petition, posted in November 2024, won more than 80,000 signatures but ultimately did not result in a policy change.

Sources:
Cointelegraph via TradingView: Petition to scrap South Korea's crypto tax reaches 50K threshold
The Paypers: South Korea delays crypto capital gains tax to 2027
The CC Press: South Korea crypto tax petition reaches 50,000, moves to committee