South Korea plans to establish a "virtual asset management system" to strengthen supervision

South Korea's National Tax Service (NTS) recently announced plans to introduce a TRAC system, which will be developed by consulting firm GTIC. The system, called the "Virtual Asset Integrated Management System", is designed to analyze and manage transaction data related to digital currencies.

The National Tax Service has selected GTIC as the sponsor for the project, and has been consulting for about four months. It hopes to prevent tax evasion and monitor illegal transactions by improving the transparency and fairness of virtual asset transactions. Based on the results of the consultation, the National Tax Service has issued a request for proposals for the construction of the system, and the TRAC system is scheduled to open in 2025. With the revision of the Corporate Tax Act and Income Tax Act, virtual asset operators are obligated to submit transaction information, but there is a lack of ways to analyze and manage this information in South Korea. Therefore, the National Tax Service plans to prevent tax evasion through virtual assets through TRAC and realize fair taxation. In addition, the TRAC system will become an important tool for the National Tax Service and regulators, helping to improve the level of supervision of the virtual asset market, prevent risks, and maintain the stability and fairness of the financial market.

South Korea's positive stance on digital asset regulation reflects the global trend to ensure financial stability and prevent illegal activities. Current regulations from the South Korean government require crypto service providers to strengthen anti-money laundering (AML) and know-your-customer (KYC) protocols. In addition, the South Korean government is also considering including crypto asset gains in the financial investment income tax plan to further strengthen the regulation and management of the virtual asset market.

Although the future of the cryptocurrency market is full of uncertainty, this move by the South Korean government demonstrates its determination to meet the challenges of the emerging virtual asset market. As the global regulation of the cryptocurrency market becomes stricter, governments and regulators are struggling to balance innovation and risk to ensure the stability of the financial system and protect the interests of investors.