| In this March 23 file photo, Hong Nam-ki, center, then head of the Office of Government Policy Coordination, talks with Park Eun-young, head of the Anti-Corruption and Civil Rights Commission earlier this year. / Yonhap |
By Park Si-soo
The South Korean government is planning to tax cryptocurrencies and initial coin offerings (ICOs), says finance minister nominee Hong Nam-ki.
In a written answer submitted to the National Assembly Sunday for his confirmation hearing, Hong said the taxation plan would be finalized in accordance with the creation and progress of the taxation infrastructure and the trend on international discussions.
"A task force consisting of experts from relevant government agencies including the National Tax Service and the private sector will be formed to examine overseas examples and hammer out the taxation plan," he said.
He defined cryptocurrency as "electronic signs of values issued privately" rather than central banks and financial institutions. He added that about 2,000 cryptocurrencies were traded globally and 160 domestically.
"Cryptocurrencies are a new phenomenon and so there is no internationally agreed regulatory framework," Hong wrote. "Furthermore, there are such lingering problems as the market overheating and investor protection. Therefore, we need to be careful in building the regulatory framework."
He said whether to allow ICOs -- which are banned in Korea -- would be carefully considered after watching market conditions, international trends and investor protection issues.
"We will determine our policy orientations on ICOs with relevant agencies after reviewing the results of the financial regulator's market survey and getting feedback from experts," he said.
Regarding the government's exclusion of crypto exchanges from the category of start-up businesses, he said the exclusion reflected the criticism that crypto exchanges were vulnerable to illegal acts and were merely a brokerage service separate from blockchain technology.
"We will do our utmost to nurture blockchain technology as nine out of the 10 business types classified as blockchain-related businesses by Statistics Korea excluding the crypto exchanges can be still acknowledged as venture companies," Hong said.?