With the change in currencies from physical to virtual, there are also many countries which are in favor of having strict rules for the use and exchange of cryptocurrencies. Hence the market for the same is not yet opened as expected by the users of such currencies. The market for cryptocurrencies is losing a lot of international traders in South Korea as there is huge uncertainty over regulations. Authorities from South Korean exchanges expressed their problems in this regard as they are not able to provide fiat trading options through authenticated bank accounts.
A temporary solution to the problem
Some exchanges have partnered with internet-only banks, and this partnership will allow them to offer fiat trading for investors in this region. However, this is viewed only as a temporary solution and much needs to be done to improve the situation in the long run. The facility will somehow work only for Korean nationals as the regulations bar foreign nationals from opening an account with banks that offer only internet-based services.
The problem for non-Korean traders
With this sudden move, non-Korean traders are upset a lot as they have to remove their funds from the exchange now. The exchange officials said that they have no other choice in this regard as regulations bound them, and they have to stick to regulatory compliance by barring non-Korean citizens from the exchange. In a similar move, other exchanges based in Korea like Coinone and Korbit have also made a stringent authentication process, and this will also remove foreign traders from the exchanges. They are now asking for a domestic mobile number in order to participate in the trades on the exchange. As the foreign nationals will not have such facilities, they will have to move their funds to other exchanges.
20% tax on profits
The non-resident traders are paying taxes higher than 20% when they withdraw their profits. The regulators have only imposed 20% tax, and the exchange is collecting additional money just to safeguard the traders when new regulations come into effect. As the government is yet to confirm the exact rates of taxes, the exchanges are now charging slightly higher rates so that it will help traders to settle the transactions in an easy way. The exchange authorities clarified that if the taxes fixed by the government are less than 20%, they will make refunds to the traders.