[Bitcoin Now] Key Digital Asset Issues at This Year's National Assembly Audit: 'Delayed Legislation' and 'Rushed Taxation'

National Assembly Research Service Cites Legislative Delays and Taxation as Audit Issues

Public Hearing on Digital Asset Basic Act Cancelled This Month

Institutional Uncertainty Raises Concerns Over Domestic Market Competitiveness

Taxation Moves Forward Despite Slow Progress on Institutional Framework, Stirring Controversy

While the legislative process surrounding the digital asset market continues to be delayed indefinitely, moves to enforce taxation are advancing, making this a focal issue in this year’s National Assembly audit. Market observers point out that collecting taxes before even establishing the most basic institutional framework to foster and protect the industry reflects a misplaced administrative urgency that has upended proper policy priorities.

According to the National Assembly Research Service, the recently published “2026 National Assembly Audit Issue Analysis” report identified two core issues in the digital asset sector: the delayed legislation of the Digital Asset Basic Act (phase two), and the appropriateness of the timing for virtual asset income taxation. The report noted that, contrary to initial plans, delays in enacting the law have intensified regulatory uncertainty, while even a fair infrastructure and detailed standards for tax collection are lacking.

"Public Hearing Cancelled"...Worsening Uncertainty as Legislation Stalls

At the beginning of the year, the administration pledged to promote the phase-two Digital Asset Basic Act—which covers segmentation of the digital asset industry, regulation of stablecoins, and shareholding limits for major shareholders of exchanges—within the year through its “2026 Second-Half Economic Growth Strategy.” However, concrete legislative proposals and the deliberation process have been delayed, heightening regulatory uncertainty.

Originally, the plan was to proceed with the bill through a public hearing in September, the audit in October, a legislative subcommittee review in November, and finally the regular National Assembly session. However, as the public hearing for the Digital Asset Basic Act—scheduled for the end of this month—was effectively cancelled due to the delay in submitting the government’s proposal, the related timeline is expected to be pushed back even further.

Policies announced so far have mostly focused on individual issues such as corporate market participation and major shareholder eligibility for exchanges. Comprehensive principles for system design and a clear road map for implementation across the entire market have yet to be presented. With an inadequate framework for market-wide regulation, key investment decision criteria—including listing review standards, management of circulating supply, and disclosures—are currently managed under the self-regulation of virtual asset exchanges and the association (DAXA).

The National Assembly Research Service stated, “The market has long been regulated in practice by factually effective, but legally unarticulated, restrictions—including bans on ICOs, limitations on corporate participation, the ‘one exchange, one bank’ practice, and the mandatory separation of financial functions. This makes it difficult for market participants to predict future regulatory directions. Such institutional uncertainty is cited as one reason domestic digital asset projects establish foundations overseas, list on foreign exchanges through indirect means, or relocate blockchain startups abroad. Ongoing concerns have been raised that this undermines the competitiveness of the domestic industry.”

Virtual Asset Income Taxation: Opposition and Investors Call It “Premature,” Government Insists on Implementation Next Year

The bigger issue is the planned implementation of taxation on virtual asset income. There is strong opposition from the opposition party and investors, and calls for deferral are arising even within the ruling party.

Under the current Income Tax Act, from January 1 next year, income from trading virtual assets exceeding 2.5 million won annually will be subject to a tax rate of 22% (including local income tax) on the portion exceeding that amount. Virtual asset taxation was first prepared in 2020 as part of changes to the Income Tax Act, establishing a separate taxation system for other income derived from the transfer or lending of virtual assets, with implementation originally planned for 2022. However, due to investor backlash and lack of tax infrastructure, implementation has already been postponed three times: to 2023, 2025, and now 2027.

Previously, Jeong Jeom-sik, floor leader of the People Power Party, stated at the “Digital Asset Tax System Reform Policy Discussion” held on the 21st, “When it comes to transactions involving foreign exchanges or individual wallets, it is difficult to accurately determine the acquisition price and transaction history, and the criteria for how to reflect gains and losses from new types of transactions have not yet been clearly defined. Regulatory overhaul for the digital asset industry remains underway, and with the institutional foundation for the industry not yet fully established, we need to reconsider whether it is appropriate to stick to the planned taxation schedule.”

On September 22, Min Byung-deok, chief deputy policy chairman of the Democratic Party, wrote on Facebook, “To tax properly according to principle, we first need the necessary foundation to ensure fair collection, but that foundation is not yet ready,” suggesting that taxation should be implemented only after the passage of the Digital Asset Basic Act.

Nonetheless, despite this political climate, the government is maintaining its stance to proceed with taxation as planned. On September 28, Lee Hyung-il, Deputy Prime Minister and Minister of Economy and Finance, stated at a plenary session of the National Assembly’s Planning and Finance Committee, “Under current tax law, taxation is scheduled to begin next year. According to our investigation, about 85% of holders possess less than 5 million won, and because the basic deduction of 2.5 million won applies to these holders, their tax burden will be minimal or negligible.”

This content was produced with the assistance of AI translation services.