South Korea’s National Tax Service launched an AI tracking system project on May 8 with a budget of about $2.2 million, targeting full deployment by the end of 2026. The system is designed to combine exchange trading records with on-chain blockchain data and flag suspicious activity tied to money laundering, unreported gifts, and offshore tax evasion.
A key part of the plan is extending surveillance to non-custodial wallets. That area has been difficult for tax authorities to monitor when reporting relies mainly on centralized exchanges. ETNews said the platform will map fund flows between wallets and use AI to detect abnormal patterns.
Verified crypto investors reach 11.13 million
According to the latest survey from the Financial Services Commission, the number of real-name verified crypto investors on won-denominated exchanges reached 11.13 million by the end of 2024. That is close to double the 5.58 million recorded at the end of 2021.
Growth, though, has slowed sharply. Tradeable accounts expanded by 25% in the first half of 2024, then dropped to just 3% in the second half. The report said industry participants point to two reasons: crypto returns have lagged stocks and commodities, and South Korean exchanges currently only offer spot trading, with no derivatives or leverage products for higher-risk traders.
Exchange operators are still adding staff. Data from the FSC’s public disclosure system showed the combined headcount at Upbit and Bithumb rose from 682 in 2021 to 1,334 by the end of 2024. Upbit grew from 370 to 696 employees, while Bithumb increased from 312 to 638.
22% crypto capital gains tax set for January 1, 2027
Moon Kyung-ho, head of the income tax system division at South Korea’s Ministry of Economy and Finance, said on May 7 that taxation of virtual assets will proceed as scheduled. The rate will be 22%, made up of a 20% national tax and a 2% local tax, and will apply to annual crypto gains above 2.5 million won, or about $1,800.
The tax had originally been due to start in 2025, but was delayed twice after political disputes and industry opposition. The new deadline is fixed at January 1, 2027. The National Tax Service is now working with five won-based exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — on implementation guidelines, with the process expected to be completed by the end of 2026.
As that timeline approaches, some traders are weighing a move to overseas exchanges that do not impose crypto capital gains taxes. At the same time, the upcoming AI tracking system may make those transfers harder to keep out of sight.