South Korea’s Crypto Tax Faces Fresh Scrutiny After Petition Gains Momentum

South Korean lawmakers are preparing to revisit the country’s planned cryptocurrency tax framework after a public petition calling for its cancellation gathered enough support to trigger a formal legislative review.

The petition, which seeks to scrap the digital asset tax scheduled to begin next year, crossed the 50,000-signature threshold on Thursday morning local time. The milestone was reached just over a week after the proposal was filed through the National Assembly’s public petition system, automatically sending the matter to a parliamentary committee for examination.

In the petition, the unidentified author argued that imposing taxes on crypto profits places digital asset investors at a disadvantage, particularly after the government removed taxes on gains from conventional financial products like stocks and bonds.

The motion also raised concerns about ongoing risks in the local crypto sector, pointing to fraudulent schemes and questionable token listings that continue to expose retail investors to losses. According to the petitioner, investor protection mechanisms remain insufficient while the proposed tax system fails to account for the extreme price swings commonly seen in crypto markets.

The document framed the issue as more than a simple tax dispute, describing it as a broader debate over the government’s stance on digital assets and the future direction of South Korea’s financial technology industry.

Critics of the current approach argue that authorities have focused too heavily on regulation and tax collection while doing little to strengthen the competitiveness and innovation of the domestic crypto market.

Under the current proposal, South Korea plans to introduce a 22% tax on cryptocurrency gains exceeding 2.5 million won, or roughly $1,650. The rollout has already been postponed three separate times amid political disagreement and concerns that the country’s regulatory infrastructure is not fully prepared.

Despite mounting criticism, South Korea’s National Tax Service recently signaled that it still intends to proceed with the taxation policy according to schedule next year.