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Regulation

South Korean government to delay crypto tax rules by three months

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The South Korean National Assembly is planning to delay the implementation of new income tax laws on cryptocurrency gains following appeals from industry bodies.

According to a Nov. 25 report on Korean-language news site DongA, the 20% tax, originally due to be imposed from October 2021, will now not come into force until Jan. 1, 2022.

The delay is intended to give digital currency exchanges time to implement the changes required to incorporate the new tax infrastructure.

As Cointelegraph reported, the new tax structure for cryptocurrencies was announced in July this year and amounts to a 20% tax on any gains over a threshold level of 2.5 million won ($2,260) per year.

The rules were originally planned to come into force on Oct. 1, 2021, which led to complaints from the Korean Blockchain Association.

The KBA claimed that the short window between the existing tax regulations ceasing to apply on Sept. 30, 2021 and the new regime coming into force the very next day would be difficult for exchanges to comply with, initially requesting a delay until Jan. 1, 2023.

The government seems to have acquiesced to some degree, although it only agreed to an extension of three months rather than the 15 months requested.

Prior to the introduction of the new legislation, digital assets have been treated as currencies and so have not attracted taxation.



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Regulation

Dutch crypto exchange users bemoan additional KYC requirements

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Crypto exchange platform Bitstamp is reportedly demanding additional Know Your Customer compliance steps for Dutch-based users.

According to a notice sent to Twitter user “Bitcoin Marcus,” — a Bitstamp user — the platform says account holders in the Netherlands have until the end of January to provide additional verification documents or risk their accounts being suspended.

As part of the additional KYC protocols, users must provide information about their net worth, nationality and proof of residence. Other documents demanded by Bitstamp include the source of funds — both for fiat and crypto.

Indeed, the exchange is reportedly forcing Dutch-based customers to reveal sensitive personal information like their salaries and investment proceeds.

These KYC steps are in addition to an earlier order mandating users to whitelist their third-party withdrawal addresses by providing photographic proof of ownership of those wallets.

Responding to Bitcoin Marcus’s complaints on Twitter, Bitstamp remarked, “Unfortunately, this procedure is required for our users from the Netherlands due to new regulation regarding cryptocurrencies introduced by the Dutch government.”

For Bitcoin Marcus, however, Bitstamp is bending over backward to satisfy Dutch authorities, especially the central bank, adding that only exchanges headquartered in the Netherlands require these additional KYC compliance steps.

Commenting on customer complaints regarding the KYC policies, Bitstamp chief technology officer David Osojnik told Cointelegraph:

“The solution we’ve implemented for verifying crypto withdrawal addresses is extremely straightforward and as unobtrusive as possible, while still satisfying the requirements set by the Dutch authorities. We do, however, realize that this situation may inconvenience our customers and encourage you to contact your local representatives or the DNB regarding the matter.”

Dutch authorities issued new requirements for crypto exchanges back in 2019 with the measures coming into effect in November 2020. As previously reported by Cointelegraph, Bitonic, a crypto exchange in the Netherlands, described the new measures as “a nuisance.”

Requiring users to hand over personal and financial information may also pose a security risk. Centralized databases holding such sensitive data are usually a target for cybercriminals.

Exchanges and other crypto businesses have fallen victim to malicious cyber-incursions exposing user data. Hardware wallet maker Ledger is a prime example with almost 300,000 users having their details compromised by hackers.