A grassroots petition against South Korea’s upcoming 22% tax on cryptocurrency gains has secured over 52,000 signatures, surpassing the required threshold for legislative consideration. The tax, set to take effect in January 2027, has sparked widespread pushback from investors and industry advocates who argue that it imposes significant financial and reporting burdens on crypto holders.

The petition highlights that the proposed tax threatens the growth of South Korea’s crypto market by placing heavier tax rates on digital assets compared to other investment classes, potentially discouraging domestic investment and innovation. Signatories also emphasize how younger generations, already struggling with soaring real estate prices, could face diminished financial mobility due to this policy.

According to the petition’s authors, short-term government revenue drawn from crypto taxation could backfire, leading to an industry contraction and the migration of capital and talent to other jurisdictions with more favorable policies. South Korea, widely regarded as an important crypto hub in the Asia-Pacific region, counted approximately one-third of its population as cryptocurrency owners as recently as early 2025.

However, data show a marked decline in crypto market activity over the past year. The total value of cryptocurrencies held by South Koreans fell nearly by half, from 121.8 trillion won (about $83.3 billion) in January 2025 to 60.6 trillion won ($41.4 billion) in February 2026. Correspondingly, daily trading volumes on the country’s five largest exchanges dropped significantly, from $11.6 billion in late 2024 to just $3 billion earlier this year.

Industry critics also point to increasingly stringent anti-money laundering (AML) rules and know-your-customer (KYC) regulations as major factors driving traders away. Regulatory bodies proposed automatic suspicious transaction reporting for all crypto transfers exceeding 10 million won ($6,630) involving foreign wallets. Exchange operators and advocacy groups warn that this will create operational challenges and deter market participation.

  • The 22% tax targets gains from crypto investments starting January 2027.
  • The petition reached more than 52,000 signatures, prompting a review by the Finance and Economic Planning Committee.
  • Younger South Koreans cite the tax as an obstacle amid an already difficult housing market.
  • Total crypto holdings in South Korea halved in about 13 months, illustrating market contraction.
  • New AML policies require flagging crypto transactions over 10 million won to/from foreign wallets.