Democratic Party Lawmaker Min Byoung-dug Says Taxing Crypto Now Would Kill Market, Urges Delay Until 2027

Min Byoung-dug, a lawmaker from South Korea’s Democratic Party, said digital-asset taxation scheduled to take effect next year should be delayed because the country still lacks key tax infrastructure, including access to overseas trading data and a system to carry forward investment losses.

Appearing on the YouTube channel SamproTV on Oct. 14, Min said, “If we impose taxes on digital assets now, this market dies,” and called for a review of the implementation timeline.

He said there is a fairness issue between domestic and overseas exchanges. Trading records from local platforms can be verified, but South Korea does not yet have a system to obtain data on transactions made through foreign exchanges. If taxation begins under those conditions, only users of domestic exchanges would effectively be taxed, potentially driving investors to offshore platforms.

Min also said the institutional framework for the digital-asset industry should come first. He said authorities should establish the rules needed to run the market by enacting the Basic Digital Asset Act before moving ahead with taxation. Imposing taxes before the legal framework and industry environment are in place would be inappropriate, he said.

He also cited the absence of a loss carryforward deduction. Min gave the example of an investor who posts a 10 million won ($7,200) loss one year and a 10 million won ($7,200) gain the next. Although the investor’s total profit over the two years would be zero, the current tax plan would still impose a 22% tax on the amount above the 2.5 million won ($1,800) basic deduction, resulting in a tax bill of 1.65 million won ($1,190).

He said the system should be revised so losses on digital-asset investments can be carried forward and deducted for at least five years. The former financial investment income tax included a five-year loss carryforward provision, and he said a similar standard is needed for the digital-asset market, where short-term trading is active.

Still, Min said he is not calling for the tax to be scrapped. “I’m not saying abolish it. I’m saying delay it,” he said, adding that the government needs time to build a system to collect and analyze overseas trading data, introduce a loss carryforward deduction and allow companies to prepare tax and foreign-exchange compliance systems.

He also proposed that any bill delaying taxation should include a specific implementation timetable. The government should set preparation tasks in stages, such as every six, 12 and 18 months, he said. Min added that taxation itself is necessary, but imposing it without fairness and transparency could burden the market and the industry.