South Korea’s election sets off a wave of cryptocurrency market

South Korea will hold midterm elections today, which will be a referendum on President Yoon Seok-yeol’s government. The election results will have a major impact on South Korea’s cryptocurrency industry, as the two main political parties, the Democratic Party of Korea (DPK) and the People’s Power Party (PPP), hold different stances on cryptocurrency regulation.

South Korea is a major player in the global cryptocurrency market, with approximately 70% of all reported foreign assets in cryptocurrencies. Changes to its regulatory framework could have knock-on effects on the broader crypto ecosystem. The election results will impact investor sentiment and market dynamics, including the cryptocurrency market. Supportive policies can attract more investment into cryptocurrencies, while uncertainty or unfavorable policies can lead to market volatility.

South Korea fights for cryptocurrency regulation

The ruling party PPP has shown its willingness to delay the implementation of digital asset tax. They are willing to discuss the timing and details of taxing digital assets. The party plans to establish a digital asset management framework and standardize listing standards for all centralized exchanges to protect investors. Additionally, the PPP will allow the issuance of tokens for projects with investor protection mechanisms.

PPP will also promote the implementation of the second phase of the Digital Asset Investor Protection Law, which aims to regulate and protect investors in the digital asset market. The move is part of the South Korean government’s broader efforts to establish a legal framework for cryptocurrencies and related activities.

On the other hand, the opposition party DPK expressed its willingness to remove investment restrictions on US digital asset spot Bitcoin ETFs and add digital asset ETFs to ISAs to obtain tax benefits. The party vowed to increase the digital asset tax exemption from $1,850 to $37,000.

Other proposals from the Democratic People’s Republic of Korea include consolidating profits and losses over five years of taxation and a business law to launch digital asset business operations. The party also plans to establish a monitoring system to consolidate all order books of centralized exchanges operating in South Korea.

It was previously reported that a Montenegrin court had ruled to extradite Terraform Labs co-founder Do Kwon to South Korea. The decision overturns a previous ruling in favor of his extradition to the United States and highlights the intricate legal challenges Do Kwon faces in multiple jurisdictions.

Additionally, South Korean regulators recently launched an investigation into Worldcoin’s handling of private and sensitive data.