South Korea National Assembly to Review Proposed Crypto Tax Following National Petition Milestone

• The draft policy proposes a 22% tax on crypto capital gains that exceed 2.5 million Korean won (~$1,650), and is scheduled to come into effect in 2027.
• South Korean crypto investors argue that the proposed tax is unfair, basing their argument on the fact that South Korea has recently abolished income taxes on traditional investments such as stocks and bonds.
• The country was already forced to delay the introduction of the crypto tax three times due to public criticism and underdeveloped infrastructure.

South Korea first introduced the crypto tax proposal for a 22% capital gains tax, with implementation scheduled for 2027. If passed, the taxation will be imposed on crypto income exceeding 2.5 million Korean won (~$1,650). Earlier this month, the National Tax Service reasserted its intention to move forward with the policy, with the first tax filings scheduled for early 2028. However, the proposal has been met with strict public opposition. Most recently, a public petition that has reached 50,000 signatures has triggered an automatic referral to a legislative committee for formal consideration. According to South Korean regulations, any public petition that has secured 50,000 verified signatures within a specific time frame goes directly to the National Assembly’s legislative committee.

The petition argues that taxing gains from cryptocurrencies would be unfair, since the country has abolished income taxes on the more traditional forms of financial investments, such as stocks and bonds. The petition further states that the country currently lacks adequate investor protection frameworks, which should be the main focus. Another highlight of the petition is that the government puts excessive emphasis on regulation on tax revenue instead of fostering innovation and competitiveness in the local crypto economy.

South Korea is one of the most high-volume crypto trading nations in Asia, both on a retail and institutional level. According to the December 2025 Financial Stability Report by the Bank of Korea, crypto holdings witnessed an increase from 89.2 trillion Korean won in June 2025 to 112.6 trillion Korean won in September 2025, reaching about 2.0% of global market capitalisation. Therefore, the proposed 22% tax has the potential to carry certain implications in terms of capital allocations and exchange liquidity dynamics, especially within East Asia:

• If the proposed tax is implemented, capital could flow towards alternative jurisdictions or unlicensed offshore entities.
• If, on the other hand, the National Assembly decides to repeal the draft plan, this could create a highly competitive and tax-free retail environment for digital assets.
• The introduction of a crypto tax in 2027 may force South Korean investors to increase activity before it officially starts. In this case, an increase in trading volume is to be expected, with possible market volatility.
• Cancellation of the draft tax could benefit crypto exchanges and brokers, since it would keep investors active, and support trading revenues.
• If the taxation comes into effect, financial companies will need to quickly upgrade their systems to track and report user transactions to the relevant authorities.

Critics of the proposed tax argue that this would hinder growth and innovation in the fintech sector in addition to being unfair towards investors that prefer non-traditional means. They also point out that the lack of proper legal protection for investors combined with high taxes could make the market less attractive and increase risks for retail investors, in addition to potentially discouraging participation and foreign investment. Therefore, the upcoming policy review by the South Korean National Assembly will represent a critical juncture for the country’s digital assets policy.