Ministry seeks purview over cryptocurrencies

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Ministry seeks purview over cryptocurrencies

Finance Minister Kim Dong-yeon said Wednesday that he wants to bring a cryptocurrency task force currently under the prime minister’s office into his purview, with the possibility of taxing profit from cryptocurrency trading.

The minister was responding to questions from lawmakers on the National Assembly’s Strategy and Finance Committee in Yeouido, western Seoul, about his ministry’s plans for the year.

When Rep. Choo Kyung-ho from the conservative Liberty Korea Party pressed Kim on whether the task force studying cryptocurrencies should be under the Ministry of Strategy and Finance since it is an issue of economics, Kim responded, “Initially, [the government] planned to prepare measures [on cryptocurrencies] with the Financial Services Commission in charge, but it was thrown to the prime minister’s office because it expanded into a social and legal issue.”

Korean regulators have come under fire in the past few weeks for their inconsistent stances on cryptocurrency trading. Heads of various agencies including the Ministry of Strategy and Finance and Fair Trade Commission have expressed views ranging from open hostility to cautious embrace.

The finance minister on Wednesday apologized for the government’s handling of the situation, saying officials should have been “more sensitive” about policy announcements.

The market has been on edge since January, when the government repeatedly flip-flopped on whether it would completely shut down cryptocurrency exchanges.

However, Kim stressed that the government had no plans to get rid of or suppress cryptocurrency trading. The government, he said, would continue to encourage the development of blockchain technology underlying cryptocurrencies, calling it essential for the future of Korean industry.

Still, the minister found fault with the current cryptocurrency market, calling it overheated and in need of a cooling. “We have to get rid of the side effects and risk factors created from the transaction of cryptocurrencies,” he said.

Because of these complications, the government is approaching the issue seriously, Kim said, but it will also “regulate rationally.”

“We are looking into all possibilities, including applying taxes on transactions,” Kim said. “The category will be different depending whether [cryptocurrency profit] is considered a capital gain or other income.”

His ministry has sent employees overseas to study models for taxing cryptocurrencies.

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