South Korea's crypto bill nears completion while tax debate intensifies: reports

South Korea's long-awaited crypto regulatory framework is in the final stages of government consultations, according to the country's top financial regulator.

Lee Eog-weon, chairman of the Financial Services Commission, said Thursday during a parliamentary hearing that discussions on the Digital Asset Basic Act were nearing completion and that the government will work to introduce it as soon as possible, local news outlet Bloomingbit reported.

The legislation seeks to establish a comprehensive framework for crypto assets, including licensing regimes for exchanges, rules for stablecoin issuance, and clearer legal definitions.

Local lawmakers have raised concerns about how the country's upcoming crypto taxation could take effect before the crypto framework establishes fundamental rules for the comparatively nascent sector. 

During the hearing, Lee said that cryptocurrency taxation should "take various circumstances into full consideration," according to a Yonhap report.

Taxing crypto

The tax program, targeted to take effect on Jan. 1, 2027, has already been delayed three times due to controversy over fairness and underdeveloped infrastructure.

In May, a petition seeking to repeal the planned tax reached the 50,000-signature threshold required to trigger a legislative review, under the rules of the national petition program. A different petition in August, which sought a two-year deferral, also reached 50,000 signatures in mid-September.

Kim Min-seok, leader of the ruling Democratic Party of Korea, said Thursday that he is reviewing various inputs on the crypto tax plan, amid mounting pressure to delay it.

"Recently, there have been growing calls and diverse opinions on this issue, so yesterday I raised the need to conduct a thorough final review," Kim said, according to Yonhap. Kim's comment suggests a more flexible posture from authorities, who had previously insisted on sticking to the 2027 implementation timeline.

Meanwhile, the National Tax Service is proceeding with plans to finalize its digital asset tax notice draft by October 30, with a preliminary review and public notice to follow in November in line with the existing schedule, according to a Thursday report from local news outlet Digital Asset.