FinTax Crypto Compliance Highlights (Feb 2025, Issue 1)
The latest updates in taxation primarily come from Asia. In India, an amendment to the Income Tax Act mandates that cryptocurrency holders must report related profits or face a tax penalty of up to 70%. In South Korea, authorities in Seoul have intensified their tax enforcement efforts, planning to confiscate and liquidate cryptocurrencies held by tax evaders, underscoring a strict crackdown on tax violations. Meanwhile, Japan’s Financial Services Agency (FSA) is considering classifying cryptocurrencies as financial products akin to securities and plans to lower the tax rate to 20% to foster market growth and protect investor interests.
Several significant regulatory updates have emerged across different regions. In the United States, the Securities and Exchange Commission (SEC) and Binance have jointly filed a motion to pause proceedings in Binance’s cryptocurrency-related case. At the same time, the U.S. Senate is investigating whether Dan Morehead, founder of Pantera Capital, violated federal tax laws after relocating to the tax haven of Puerto Rico.
In Europe, Poland’s central bank has explicitly rejected the inclusion of Bitcoin in its national reserves, aligning with the stance of other European countries. Meanwhile, the Jordanian government has announced plans to establish a comprehensive regulatory framework for digital assets, expected to be finalized within a year. In the Asia-Pacific region, Hong Kong has officially recognized Bitcoin and Ethereum as valid asset proof for investment immigration, marking a further acknowledgment of cryptocurrencies in the global financial system. Additionally, South Korea’s Financial Services Commission (FSC) has unveiled a phased plan to gradually allow businesses to participate in cryptocurrency trading, aiming to open up the crypto market while reinforcing risk management measures.
Part I Tax
Tax-India-The amendment to India’s Income Tax Act requires cryptocurrency holders to report related profits, or they will face a tax penalty of up to 70%. (2.2)
According to the 2025 Federal Budget Announcement, cryptocurrency is classified as a virtual digital asset, and holders must report previously undisclosed crypto income, or they will face a tax penalty of up to 70%. The bill is retroactively effective from February 1, 2025. Click here to read the original article.
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Tax – South Korea – Seoul districts to confiscate cryptocurrency from tax evaders as South Korea’s local tax crackdown intensifies (2.2)
More districts in Seoul are set to confiscate and liquidate cryptocurrencies held by citizens who fail to pay local taxes, as South Korean districts intensify their efforts to crack down across the country. According to South Korean media reports, the southern Seoul district of Gwanak will require the country’s five legal tender cryptocurrency exchanges to hand over data on “delinquent” residents. Similar operations have been carried out in provinces and large cities over the past few years. They have seized millions of dollars worth of Bitcoin and other cryptocurrencies from local tax evaders. Click here to read the original article.
Tax-Japan-Japan’s Financial Services Agency proposes to treat crypto assets as financial products similar to securities and implement tax breaks and approve ETFs (2.10)
Japan’s Financial Services Agency (FSA) has begun to consider positioning crypto-assets (virtual currencies) as financial products similar to securities in order to enhance investor protection. To this end, the FMA is holding closed-door meetings with experts to review the adequacy of current cryptocurrency regulatory measures. According to Bloomberg, the panel of experts set up by the Office of Financial Services generally agreed that cryptocurrencies have become important investment vehicles. The new system also plans to lift the ban on spot ETFs for bitcoin and reduce the cryptocurrency tax rate to 20 percent from the current 55 percent, aiming to balance investor protection with market revitalization. Click here to read the original article.
Tax – US – The US Senate Finance Committee is investigating whether Dan Morehead, founder of crypto venture capital firm Pantera Capital, violated federal tax laws after moving to tax haven Puerto Rico (2.14)
The Senate Finance Committee is investigating whether Dan Morehead, founder of Pantera Capital, violated federal tax law by evading hundreds of millions of dollars in taxes by moving to Puerto Rico and taking advantage of special tax breaks on the island. According to the Commission’s letter, Morehead sold a large number of shares after relocating to Puerto Rico and received more than $1 billion in capital gains. The committee asked Moorhead to provide detailed information related to these transactions, including the names of tax advisors and a list of assets sold, particularly the cryptocurrencies involved. Click here to read the original article.
Part II Compliance
Compliance – Jordan – Jordan develops comprehensive regulatory framework for digital assets (2.1)
Late last month, the Jordanian government approved a plan to establish a comprehensive regulatory framework for digital assets within a year. The framework will bring Jordanian regulations in line with global standards and facilitate the development of the digital economy. Jordanian Prime Minister JafarHassan reportedly chaired meetings to develop the government’s program to implement the framework.
Compliance- Hong Kong – Hong Kong Immigrant Investors Recognize Bitcoin, Ether as Proof of Assets for the First Time (2.8)
On February 7, 2025, a client who used Ether worth HK$30 million as proof of assets to make an investment immigration application to Invest Hong Kong was approved.2024 In October 2024, a client who used Bitcoin as proof of assets was also approved, which was the first case in Hong Kong where an application for investment immigration using cryptocurrency as an asset was approved. The clients concerned are basically from Mainland China.
Compliance -Poland-Poland’s Central Bank Rejects Bitcoin as Reserve Currency Due to Security Concerns (2.8)
The National Bank of Poland (NBP) has vehemently denied any possibility of including Bitcoin in its national reserves due to security and stability concerns. Poland’s decision is in line with the broader European stance on a national reserve for Bitcoin. But with all eyes on Poland’s upcoming general elections, a change in leadership could reshape the country’s reserve policy and potentially usher in a new era of Bitcoin adoption. Click here to read the original article.
Compliance -U.S.-Task Force Established After Binance and SEC Seek 60-Day Moratorium on Cryptocurrency Cases (2.11)
The U.S. Securities and Exchange Commission (SEC) and Binance filed a joint motion on Feb. 10 for a 60-day stay of the litigation case. The motion marks the first time major cryptocurrency litigation has been suspended since Mark Uyeda became acting chair of the SEC. Click here to read the original article.
Compliance -South Korea-Korea’s Financial Services Commission to roll out corporate cryptocurrency trading program in three steps (2.13)
South Korea’s Financial Services Commission (FSC) will allow businesses to participate in cryptocurrency trading in phases, marking a significant shift in the country’s regulatory stance. The financial regulator aims to gradually integrate businesses into the digital asset market while ensuring protection against financial risks. Click here to read the original article.
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