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South Korea Seeks to End Tax Breaks for Crypto Exchanges

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After Bitcoin rallied from $6,300 to $8,400, prices have slumped over the last 12 hours.

That’s as investors grow increasingly concerned about potential tax crackdowns.

South Korea, for example, is considering a law that would end tax benefits for crypto exchanges.

“While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security,” said Hong Seong-ki, head of the country’s cryptocurrency response team, South Services Commission. He continues in Forbes, “We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.”

At the moment, startups and small and medium enterprises (SME) can apply for a deduction of 50 to 100% tax in the first five years, and five to 30% after. However, South Korea believes crypto platforms don’t justify the benefits. “Cryptocurrency transaction brokerage is not effective in generating added value,” they said, as quoted by Coin Desk.

A presentation of revisions to current law will go before the National Assembly by August 31st for parliamentary debate. Following the parliamentary debate, there will be a vote on whether or not the bill should go into effect.

While exchanges could see tax revisions and stricter regulation, it would not apply to blockchain startups. Instead, according to Unhashed.com, “the Korean government, along with many of the country’s leading tech companies, has expressed continued support for blockchain technology.”

Bitcoin Bull Predicts $500,000

Despite recent negativity, bulls see significant upside ahead for Bitcoin prices.

Pantera Capital believes Bitcoin could hit $21,000 by the end of 2018. Further, it believes the coin could rally to $67,500 by 2019.

Morgan Creek Capital Management’s Mark Yusko is even sticking with a year-end prediction of $25,000. He expects a $75,000 value by 2020, $200,000 by 2022, and $500,000 by 2024. “Such predictions rank Yusko among the most optimistic of bitcoin bulls, but he says his targets are justified due to the power of the “network effect” — the theory that a communications network becomes increasingly valuable as it onboards more users,” as quoted by Bitcoin Opinion.

 

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