South Korean tax authorities are spending nearly $2 million to develop an artificial intelligence system that looks for unreported cryptocurrency income — even as lawmakers push to eliminate the very tax the system could help enforce.
Bill to Kill Crypto Tax
The People Power Party introduced the measure on March 18, when floor leader Song Eon-Seok introduced changes to the Income Tax Act that would repeal all scheduled digital asset profit tax laws.
Under current law, crypto profits will be subject to a 20% income tax starting in 2027, rising to 22% once local taxes are added.
The song says that is wrong. South Korea already treats digital assets as assets under its additional tax system, and putting income tax at the top, he says, means investors are being taxed twice for holding the same asset.
🇰🇷 JUST IN: SOUTH KOREA OPPOSING MOVE TO 2027 TAX EXCEPTION ALL CRYPTO
South Korea’s opposition party has introduced a bill to completely eliminate the 22% tax on crypto profits scheduled for 2027.
The group says it creates an unfair divide, given that the stock… pic.twitter.com/BunESTNyVS
– BSCN (@BSCNews) March 19, 2026
Time sharpens the argument. Lawmakers recently eliminated the investment income tax — a move aimed at supporting traditional financial markets and protecting retail investors.
Song pointed out that tax exemptions for stock investors while keeping them for crypto holders creates a level playing field that is difficult to justify.
Foreign investors also factor into this equation. Officials said taxing overseas investors would create a huge administrative headache, making enforcement more expensive and difficult to outweigh any potential savings. The bill aims to keep the rules simple and the market open.
The Reinforcement is Stronger Than It Is
Although this measure is working in the legislature, the National Tax Service is moving forward in a different way. The agency announced plans to use an AI-powered tracking platform, funded by approximately 3 billion Korean won, to identify unreported cryptocurrency transactions. The program is expected to be operational before the end of 2026.
That creates an unusual situation: the government may soon have a sophisticated tool to catch crypto tax evaders operating in a market where there may be no crypto tax to evade.
Image: MasterSergeant/stock.adobe.com
Law enforcement is also tightening its grip on privacy-focused cryptocurrencies — so-called “dark coins” that hide transaction details.
The National Police Agency recently introduced new rules that require dedicated digital wallets, software-based storage systems, and stricter rules for managing seized crypto assets.
The police chief noted that storage methods have changed dramatically, from warehouses to carrying wallet addresses and private keys.
Exchanges Face New Rules Starting in October
Consumer protections are getting a boost as well. Starting in October, cryptocurrency exchanges operating in South Korea will be required to actively scan all transactions for signs of fraud.
The Financial Services Commission has confirmed that exchanges must flag and stop suspicious transfers, help victims recover lost funds, and share information about possible fraud with investigative agencies.
Featured image from Pexels, chart from TradingView
Planning process because bitcoinist focuses on delivering well-researched, accurate, and unbiased content. We maintain strict sourcing standards, and each page is diligently reviewed by our team of senior technical experts and experienced editors. This process ensures the integrity, relevance, and value of our content to our readers.
