South Korea's Tax Service Imposed The Withholding Tax With No Clear Assessment Standard For Crypto-Related Businesses

South Korea's largest cryptocurrency exchangeBithumb, experienced a major financial hit by South Korean`s government at the end of a rewarding 2019. Bithumb has to pay 80 billion won (close to $69 million) in taxation fees. Interestingly, it turns out the South Korean government has no defined assessment standards for taxing crypto-related ventures, which leaves at question how the required payable amount was calculated.

The news about the taxation fee was confirmed by one of Bithumb's most significant stakeholders – Vidente, who purchased 32,4% of the crypto exchange just a week before the tax was imposed.

The crypto community sparked a wave of criticism towards the Korean government, as South Korea does not have any guidelines for assessing crypto exchange in their order books. Officials from the taxation bureau commented that "a further investigation is needed to find out how was the amount calculated and what standards were used."

Some crypto analysts consider South Korea's Tax Service did their calculations based on the vast amount of data collected from Bithumb and CoinOne in January 2019. 

The tax havoc comes amid Bithumb launching their native token and preparing for the start of their own blockchain. The so-called BithumbToken (BT) would be used as an in-exchange medium for transactions across Bithumb's crypto ecosystem. The exchange is also on the final stretch in their custom blockchain project, dubbed Bithumb Chain, which will utilize the BithumbToken.

Bithumb officials reported that "the Bithumb Chain would serve as a core communications channel for the entire Bithumb ecosystem. The new, open-source system would be at the base of all interactions within our products and services, which would help branch out from the trading sector. "

Bithumb plans to mint a total of 300 million BT tokens, although the concept implies no more than 150 million tokens to be released into circulation. The remaining half of the hard cap is going to be" burnt" from the exchange's revenue. 

Bithumb's move closely resembles Binace's BNB token launch and token`s functionalities. "Bithumb clients would have the ability to vote with their token holdings and control the governance of the Bithumb Chain in general," Bithumb added. The token would also be used as a fee payment method for various Bithumb services.

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