South Korean government announced that it will collect up to 24.2 percent of corporate and local income taxes from South Korea’s cryptocurrency exchange beginning this year, according to Yonhap News.
The South Korean government has been looking to regulate cryptocurrencies for a while now due to its unstable volatile nature, which has caused many traders to lose large sums of their investments.
Under the current laws affecting virtual currency, corporations with income over 20 billion won or $18.7 million are required to pay 22 percent and 2.2 percent of corporate and local income taxes on their income during 2016.
Exchanges are expected to pay the corporate tax on income earned by the end of March and local income tax by the end of April, an official from the Ministry of Strategy and Finance said.
For example, Yujin Investment and Securities reported that, Bithumb, one of South Korea’s major cryptocurrency exchanges, is expected to pay about 60 billion won in corporate and local income taxes because it had reached 317.6 billion won in earnings in 2016.
Also over the weekend, the South Korean government planned to require cryptocurrency exchanges to share users’ transaction data with banks, leading to its plan to impose taxes, said an uncited government official.
Last month, the government already moved to ban opening new accounts for cryptocurrency traders and limited certain exchanges to be eligible for trading. The government also required all traders to change their virtual accounts to real-name ones or face fines.
The latest cryptocurrency crackdown news caused Bitcoin to fall 7 percent on Monday after a bull market over the weekend.
The constant news from Asian governments have caused volatility swings throughout the cryptocurrency market. Prices of bitcoin nearly plummeted to $9,000 after South Korea and China news on their crackdown attempts for virtual currency, which was also fueled by an extended selloff.
After having a streak of climbing new highs, the crypto has not seen a new high since hitting $19,000 back in mid-December, according to Coindesk’s prices. Since Bitcoin’s all time high, it has fallen over 40 percent.