The source says, citing the tax agency, that the tax notice does not concern simply purchasing or holding crypto. However, if taxpayers profited, then they have to declare those gains. That is, for example, in the case of exchanging crypto for other crypto or fiat currencies, or buying goods. Interestingly though, according to the source, the tax agency sent out many more letters last year, targeting 66,000 crypto holders.

Cryptocurrency regulations vary from country to country. Moreover, with the popularity of crypto growing, more countries might be adopting stricter regulations to prevent tax evasion or money laundering activities. In March, the tax agency in South Korea caught over 2,400 taxpayers who were evading paying taxes by hiding their income in crypto. In addition, in Canada, to prevent tax evasion, the Canadian Revenue Agency (CRA) last month requested client data of crypto trading platform Coinsquare.

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The country’s government is planning to implement a 20% tax on profits in cryptocurrency, reports Cointelegraph.com. The tax will apply to holding and trading virtual assets, as well as receiving them as gifts or inheritance. It only concerns profits of over 2.5 million won (about $2,300), with smaller gains being exempt from taxation on cryptocurrency.

Most recently, the government has also introduced new measures to enforce compliance of crypto exchanges with anti-money laundering regulations in the country. According to Coingeek.com, these measures from the Financial Services Commission will apply starting from April 20 this year. In particular, the exchanges could incur fines in the event they do not comply with the regulations.

Interest in virtual currencies has grown among traders in South Korea. News.Bitcoin.com, citing newspaper Dong-A, reports daily transactions of around $7 billion on local crypto exchanges between January 1 and February 25, 2021. According to the source, the figures for the four exchanges included are higher than in the same period in 2020.  

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According to the source, citing a Pdax user and a lawyer, users do not believe they violated laws or platform rules by buying Bitcoin at this price. Instead of taking legal action against its users, for now, it is said that the exchange has locked them out of their accounts.

Since cryptocurrency exchanges deal with a large amount of funds every day, such technical errors can be quite costly. Moreover, besides system errors and outages, hacking presents another contemporary problem for such platforms. Some exchanges have not recovered from hacking incidents, in which large amounts of money were stolen. Among closed cryptocurrency exchanges are Russian-based Livecoin and New Zealand Exchange Cryptopia. 

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