In South Korea’s March 9 election, young crypto investors have become a huge influence. After the election, when a new administration takes office, real policy details will emerge. Taxes, investor protections, the travel rule, and strategies to encourage crypto firms to return to South Korea are all expected to be on the table.
In South Korea’s March 9 election, Young crypto investors have become a major force
In an effort to win over young voters ahead of the election next month, all of South Korea’s presidential candidates have revealed crypto-friendly positions.
Young people under the age of 24 earn roughly KRW 2.6 million (US$2,176) a month, confront exorbitant Seoul rent, and have no possibility of buying an apartment, therefore real estate is the most pressing issue on voters’ minds in South Korea right now. Many of them have shifted their investments to equities and cryptocurrency.
A smartphone is owned by 91 percent of South Koreans. 96.5 percent of people have access to the internet. Gaming is very popular, and most people have some trading experience. All of this adds up to a populace that is very interested in crypto assets, and a large group of Gen Z voters has emerged as a significant electoral force in the country.
In contrast to their specific vows on fixing housing concerns, candidates have presented nothing in the way of precise ideas on crypto regulation thus far. They have made statements, however, expressing their support for the industry.
“They are driven to make more crypto-friendly statements or not say anything negative,” said Steve Lee, an investor at BlockTower Capital, a hedge firm focused on crypto assets and blockchain technology. The present administration suggested a 20% tax on crypto gains over KRW 2.5 million (US$2,122) in a year in September but had to back down amid opposition from crypto investors.
While there have been proposals of blockchain-specific laws requiring investor protection and disclosure regulations, no legislation has been passed, and the lack of clarity is deterring potential institutional investors.
“Progress was made in 2021,” Lee said, “but regulatory guidance on crypto investment still needs to be clarified.”
The lack of regulation, according to Jin Kang, head of legal at Hashed, is a “calculated risk” to ensure that the ruling party can attract voters with its regulatory framework plan.
Candidates have promised to reintroduce cryptocurrency companies to South Korea. As a result of a notification put on the Financial Services Commission’s website in 2017, there is currently a de facto prohibition on initial coin offerings (ICOs), albeit it never made it into legislation or regulation.
Following the notification, cryptocurrency-related businesses relocated to Singapore or other jurisdictions to avoid regulatory uncertainty.
Kang believes that simply rescinding the notice will not be enough to entice businesses to return. He believes that only a “more holistic package” could entice people to return to South Korea with their crypto firms, which may include tax incentives combined with educational or job-related incentives and bonuses for hiring locals.
Only at the local government level have more extensive policy packages been published so far. For example, the city of Busan has been declared as a blockchain special zone with no regulations, allowing projects to test technology and services. In recent news in South Korea, the issue of insufficient protection for crypto investors has been emphasized.
WeMade’s stock price jumped after the business revealed that it would develop play-to-earn games. “Not only does this demonstrate the extent of NFT (non-fungible token) enthusiasm among retail investors, but it also demonstrates how listed firms or brand names fuel hype,” Lee added.
WeMade’s token price plummeted last month as word circulated that the business was selling off its WEMIX tokens in tranches, prompting accusations that it was benefiting itself at the expense of retail investors.
WeMade said in its white paper that 74% of its tokens would be utilized to promote the expansion of its ecosystem. Its goal was for the token to become an in-game currency in at least 100 titles, according to the company.
There is currently no clear criteria for disclosure or for how transparent a firm should be about its ownership. WeMade’s CEO, Chang Hyun-guk, has promised to make transactions more transparent and repay investors.
Many of South Korea’s major entertainment and gaming organizations have expressed interest in the crypto industry, stating that they will pursue NFTs or play-to-earn games during annual and shareholder meetings.
Meanwhile, other industry analysts have claimed that blaming WeMade is unfair; instead, they blame the regulatory vacuum.
Also read: LeBron James meets his younger self in crypto.com’s Super Bowl ad
