South Korea petition challenges 22% crypto tax

A petition seeking to scrap South Korea’s planned 22% crypto investment gains tax reached the 50,000-signature threshold required for review by the country’s Finance and Economic Planning Committee.

The tax, scheduled to take effect in January 2027, has drawn criticism from investors who argue it places disproportionate financial and reporting burdens on crypto holders compared with other asset classes receiving more favourable treatment.

Petition organisers also argued the policy could further limit economic opportunities for younger South Koreans already struggling with rising housing costs and reduced access to traditional wealth-building assets.

“If taxation is enforced in order to secure short-term tax revenues, it is likely to lead to greater losses in the long term, namely, a contraction of industry and an outflow of capital and talent abroad,”

The petition stated.

South Korea remains one of Asia’s largest crypto markets, with local media outlet Yonhap reporting that roughly 32% of the population owned cryptocurrencies in March 2025, though ownership and trading activity have declined this year amid weaker market conditions.

Industry data showed the total value of crypto held by South Koreans fell from about 121.8 trillion won ($83.3 billion) in January 2025 to roughly 60.6 trillion won ($41.4 billion) in February 2026, while daily trading volumes across exchanges including Upbit, Bithumb and Coinone dropped from $11.6 billion in December 2024 to $3 billion in February.

Regulatory pressure has also intensified after South Korea’s Financial Services Commission and Financial Intelligence Unit proposed automatically flagging crypto transfers above 10 million won involving foreign wallets, prompting industry groups to warn that stricter AML and KYC requirements could create operational burdens for exchanges and accelerate capital outflows from the sector.