South Korea Postpones Crypto Tax to 2027 Amid Outflows

South Korean lawmakers from both major parties have agreed to postpone the implementation of a 20 percent tax on cryptocurrency gains until 2027, a move prompted by significant capital outflows and a contraction in the domestic virtual asset market during the second half of 2025. The Financial Services Commission, the country's top financial regulator, reported that outflows reached 90 trillion won, equivalent to about 60 billion U.S. dollars, marking a 14 percent increase from the first half of the year. This exodus, largely to overseas platforms and private wallets, has strained local exchanges amid regulatory restrictions that limit them to spot trading, driving traders to seek leverage and hedging options abroad.

The FSC's data, released in March 2026, highlighted a paradoxical trend: while user engagement grew, with the number of exchange accounts rising 3 percent to 11.1 million and customer deposits surging 31 percent to 8.1 trillion won, or roughly 5.4 billion dollars, profitability plummeted. Operating profits for the nation's 18 active exchanges fell 38 percent to 380.7 billion won, about 253 million dollars, in the latter half of 2025 compared to the first six...