“The government cannot protect the part where they invest and lose,” he said.
Eun Sung-soo, chairman of the finance committee, recently stood at the center of 폰테크 controversy at the plenary session of the National Assembly’s political committee, revealing the negative view of cryptocurrency without filtering. Chairman Eun went one step further from the position of Bank of Korea Governor Lee Ju-yeol, who said that there is no intrinsic value, and compared cryptocurrency investment to speculation or gambling, clearly drawing a line that it is not a legal protection.
The problem is that the government will impose capital gains tax (transfer tax) on cryptocurrency such as bitcoin from next year.
The financial authorities entered into the Special Financial Information Act last month and will classify cryptocurrency as other income and impose a 20% transfer tax on income exceeding 2.5 million won per year from 2022. Stocks should also pay transfer tax from 2023, but tax exemption is not required for incomes of less than 50 million won per year. On the other hand, if you earn 50 million won per year by investing in cryptocurrency, you should pay 9.5 million won in taxes. In the online community, individual investors are complaining that “cryptocurrency is a fraud that is not worthwhile, and now it is not right to pay taxes.”
However, the chairman said, “Even when I buy and sell pictures, I pay taxes on the transfer gains, but I do it under my own responsibility.” “I know that the cryptocurrency transfer tax was made according to the principle that there is a tax on the income.”“We are approaching (cryptocurrency) from the standpoint of virtual assets that have no intrinsic value that is highly speculative,” he said. “It exists in the Specialty Act because it is not used for illegal and terrorist funds.”
The Special Money Act defines virtual assets such as cryptocurrency as ‘electronic certificates that can be transferred with economic value’. Cryptocurrency exchanges must be certified by the Information Security Management System (ISMS) by September 24th, according to the Special Payment Act.
“The cryptocurrency exchange (CKR) should be registered under the Specialty Act, but there are no companies currently registered, and there are 200, but it can be closed,” said Eun. “We are making a notice once a week because it could suddenly be closed in September,” he said. “In the end, the financial system can be unstable because (side effects) come to the financial side,” he said. “We are both internally concerned and we hope to reduce the investment heat.”
He emphasized that the financial authorities do not have the obligation to protect investors in cryptocurrency and are different from the securities stipulated in the Capital Markets Act.
“I think it’s serious,” Eun said of his recent investment in cryptocurrency. “It’s a wrong way to protect people from being very interested,” he said. “We need to protect them from going up 20% a day, but adults have to tell us about it.”“The concept of protection comes out only if we assume that we are investors, and the government is obliged to protect it, so (cryptocurrency) is under its own responsibility,” he said. “The government did not ignore or abandon the people, but this is not a currency that can be recognized, but a virtual asset. Securities has capital market laws, but virtual assets are not worth it, so who will do it? “
The chairman also questioned the size of the cryptocurrency transaction, which amounted to 17 trillion won a day