South Korea’s New President Delays Crypto Taxes
On Tuesday, South Korea’s new President, Yoon Seok-yeol, announced that he would push for deferring the taxation of crypto investment profits until a new set of rules called the Digital Asset Basic Act is enacted.
Crypto tax on South Korea was due to take effect in fiscal 2022. However, they delayed it to 2023 last December.
E-Daily reports that Yoon will ensure that crypto tax laws do not affect proper consumer protection legislation, which could be until 2024.
Since March, when Yoon won the election, the presidential transition team has explored its options for delaying the tax. There was insufficient legislation to justify imposing taxes on digital assets.
Drafted this year by the Financial Services Commission (FSC), the DABA includes a set of consumer protection laws. The law covers token offerings, non-fungible tokens (NFTs), centralized exchange listings (CEXs), and crypto-related international finance. It includes a response to U.S. President Joe Biden’s executive order on crypto.
FSC plans to implement a crypto-insurance program through DABA. It will be a support measure against hacking attacks, system failures, and unauthorized transactions.
Controversial crypto tax legislation has been delayed and will impose a 20% tax on crypto investment gains over $2,100 a year.
As the FSC works to draft new legislation as part of the DABA, Yoon plans to set up the Digital Industry Promotion Agency as a reference point for regulatory issues in the crypto industry.
Crypto Regulation In The Bahamas Enters A Critical Phase
Last week, the crypto community and Wall Street gathered in Nassau, Bahamas. They discussed the future of digital assets during SALT’s Crypto Bahamas Conference. Sam Bankman-Fried’s cryptocurrency exchange FTX has co-hosted the SkyBridge Alternatives Conference (SALT) this year.
Anthony Scaramucci, the founder of hedge fund SkyBridge Capital, opened Crypto Bahamas at a press conference, explaining that the goal behind the event is to merge traditional finance with the crypto community.
Combining traditional financial institutions and crypto natives is one of Crypto Bahamas’ most striking and compelling aspects (many men and women wear suits, while some wear shorts and flip-flops).
According to O’Leary, US Senator Kirsten Gillibrand and Senator Cynthia Lummis have recently developed the cryptocurrency regulatory framework.
While some crypto community members may find intrusions by institutional players, Henri Arslanian, a senior crypto consultant at PwC, said during the conference that the crypto ecosystem should welcome institutional intrusions, noting that these centralized players bring all the required maturity and experience. Work with institutional investors.
Meanwhile, the Bahamas seems likely to be the world’s next crypto hotspot. FTX moved its headquarters from Hong Kong to the Bahamas in September 2021. Other cryptocurrency companies are likely to do the same.
Coinbase Raises First Bitcoin-Backed Loan From Goldman Sachs
Coinbase, the largest U.S. cryptocurrency exchange, was the mysterious firm that borrowed Wall Street’s first bitcoin-backed loan from Goldman Sachs.
Goldman Sachs manages $2.5 trillion in assets as of 2021.
The dollar value of the loan was not disclosed. However, Coinbase is backed by a portion of Coinbase’s total holdings of 4,487 bitcoins, worth about $170 million today. The loan features 24-hour risk management but requires Coinbase to top its BTC collateral if the price falls too low.
Bitcoin-backed and other crypto-backed loans are common in the crypto industry, especially in DeFi protocols. However, in traditional finance, people see crypto as too risky and volatile to use as collateral.
Meanwhile, Coinbase CEO Brian Armstrong laid out a vision for free speech through a decentralized social media platform. Under new owner Elon Musk, Twitter is essentially capable of operating the platform using a decentralized protocol; he told the Milken Institute on May 2.
Armstrong believes that decentralized social media platforms will allow content creators to set their own moderation policies. All content will get access per democratic principles rather than algorithms. This will prevent specific content streams from overspreading on the platform and allow users to see what they want.
If Twitter doesn’t seize the opportunity, Armstrong noted that teams are already working on a decentralized social media platform, DeSo, where users can have their own identities.
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