The South Korean blockchain associations opposed the government's plan to deprive the crypto exchanges of tax incentives

The South Korean blockchain associations opposed the government’s plan to deprive the crypto exchanges of tax incentives

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Several blockchain-associations of South Korea are trying to resist the government’s plan, which they believe will greatly weaken the development of innovations in the crypto industry, CoinDesk writes.

Associations oppose the proposal put forward on Monday by the South Korean Ministry of Small and Medium Enterprises and Startups and is intended to amend existing legislation on the country’s venture business. Under the proposal, crypto exchanges can be excluded from the category of small and medium-sized businesses and classified as entertainment and gambling.

In its proposal, the ministry refers to “the emergence of social problems like speculation possible because of crypto exchanges.” It is consistent with the government’s recently announced plan to review the current legislation in order to deprive the crypto-trading platforms of their tax breaks.

This proposal met with criticism of several blockchain associations that accused the government of suppressing innovations, because the effect of this change can affect not only exchanges, but also the blockchain industry as a whole.

Claiming that the planned amendments to the legislation are in contradiction with the course of the country’s President Mun Jain, the Korean blockchain association, the Korean association for promoting the blockchain industry and the Korean Association of Blockchain Startups sent a joint letter to the ministry on Tuesday.

“If this bill is adopted, local companies that occupy the second place after IBM in the number of blockchain-patents will be excluded from the venture business category only because they operate with crypto exchanges,” the associations write. – “This will create obstacles for investment in research and development for companies engaged in blockchain. As a result, companies that can no longer receive political incentives and tax incentives will either fail or move abroad.”

This proposal of the South Korean Ministry, open for comments and comments before September 4, 2018, is no longer the first regulatory initiative aimed at containing crypto-speculation in South Korea. Earlier this year, measures were taken in the country, according to which local exchanges can offer their services only to South Korean citizens, and also should use the verification of users by their real names.

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