Even if taxation on virtual assets is implemented as scheduled starting next year, people who use overseas exchanges are expected to be hard to tax. Domestic virtual asset service providers (VASP) such as Upbit and Bithumb are subject to the Travel Rule under the Act on Reporting and Using Specified Financial Transaction Information and the obligation to submit transaction statements under the Income Tax Act, allowing tax authorities to see transaction histories as they are. But overseas exchanges such as Binance Holdings Ltd. and OKX have no obligation to submit data, making it difficult to identify them unless the taxpayers report.
The OECD Crypto-Asset Reporting Framework (CARF), set to start next year, is also insufficient to plug the gaps. The information exchanged through CARF is aggregate data at the level of the total transaction amount and the number of transactions by user and asset type, which is said to be far from the detailed data needed to calculate acquisition costs and gains or losses.
If transactions pass through an exchange in a non-CARF country or move to peer-to-peer transactions, even that falls into a blind spot. There are no systems or infrastructure to capture transactions in countries not enrolled in CARF, transactions on decentralized exchanges (DEX), or peer-to-peer transactions. A DEX is an exchange where transactions take place between users without a central operator.
There are also ways to avoid taxation. A typical method is to withdraw virtual assets from an overseas exchange to a local account and not bring them into Korea, or to cash out through an acquaintance who has a foreign account.
They can also skip the cash-out stage by using Hong Kong-based payment service Redotpay or payment cards recently issued by global virtual asset exchanges. If they top up stablecoins such as Tether (USDT) and link them to Apple Pay, they can pay directly at domestic merchants, eliminating the process of converting coins into won.
Analysts also say that if taxation is focused mainly on users of domestic virtual asset exchanges, the amount collected will not be large. According to a survey of virtual asset service providers for the second half of 2025 that the Financial Services Commission released in March, 74% of the 11.13 million user accounts on domestic exchanges hold less than 1 million won. Accounts holding 10 million won or more account for 10% (1.12 million), and those with 100 million won or more are just 1.5%.
According to a commissioned research report published this month by the National Assembly Budget Office, investors holding 12 million won or less would owe no tax if the deemed acquisition cost of 50% and a basic deduction of 2.5 million won are applied, so actual taxpayers are estimated to be only about 10% of all investors. In other words, nine out of 10 investors captured by domestic exchange information networks would owe no tax.
Experts warn that unless tax preparations are thorough, discontent will grow among investors, and if taxation is not properly carried out on so-called "big-money" investors who use overseas exchanges, trust in the government could be shaken.
A National Tax Service official said, "No tax can be prepared perfectly, but we plan to supplement weak systems as much as possible before implementation. We are also building an integrated analysis system for virtual assets for taxation."