Bitcoin leads crypto-decline on Korean tax plans

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At present, each bank in South Korea is required to verify the names of their customers and report suspicious transactions.

South Korea is home to some of the world's largest crypto currency exchanges and a craze for bitcoin and other crypto currencies has swept the country.

Bitcoin and other cryptocurrencies fell on Tuesday as South Korea continued to target the exchanges on which the controversial digital currency units are traded. Virtual bank accounts allow traders to execute fiat-to-cryptocurrency trades efficiently, without having to withdraw or deposit using actual bank accounts that can be costly and time-consuming.

However, volatility around prices together with the lack of regulation surrounding cryptocurrency trading has led to ongoing concerns among South Korean officials that investors are leaving themselves open to potentially huge losses. It could also serve as a database to help impose transaction-related taxes on exchanges: The South Korean government said earlier this week that it is planning to collect up to 24% of corporate and income taxes from local crypto exchanges this year.

The government is planning to release guidelines late this month on the prevention of money laundering related to virtual currencies. So South Korean exchanges will be beginning 2018 with a bill due from 2017.

According to the FSC, banks are expected to introduce the new system by the end of the month.

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In fact, if we look at the performance of emerging economies in Asia alone, Malaysia actually comes out at the top of table. However, India's position lies even below other neighboring countries like Nepal (22), Bangladesh (34) and Sri Lanka (40).

Some of cryptocurrency's greatest strengths - pseudonymity, a degree of decentralization, and independence from trusted third parties like banks and central governments - have also made it a favored medium for money laundering, tax evasion, and other financial crimes. While the newly implemented AML system can be inconvenient for existing users, it is an optimistic movement for the market, since the government will no longer be able to threaten the market with a cryptocurrency trading ban.

Cryptocurrency investors and exchanges reacted positively after the government's announcement.

Despite its vast population and technical capabilities, India accounts for less than 1% of global cryptocurrency activity.

"[Banning cryptocurrency exchanges] is not realistically possible".

Along with issuing a strong warning for cryptocurrency traders, International Monetary Fund has highlighted the need of taking a collective decision on regulating cryptocurrencies. "It doesn't make any sense that markets and investors should take responsibility", THE FCA SAID.

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