South Korean Investor Brags About $24 Million Bitcoin Profit, Government Now Chasing Taxes

By | 11.01.2018

Bitcoin South Korea

On January 9, MoneyToday, one of the most widely read finance and business news publications in South Korea, reported that a South Korean investor has made a $22 million profit off a $90 investment in bitcoin he likely made in 2011.

For a $90 investment to turn into $22 million, the initial investment needs to increase by at least 244,444 times. Which means, for a bitcoin investment to increase from $90 to $22 million, the South Korean investor had purchased the cryptocurrency when it was $0.1 per bitcoin.

The Bitcoin and cryptocurrency exchange market only emerged in South Korea in late 2013, with the launch of Korbit and Coinplug, two venture capital-funded companies. Prior to Korbit and Coinplug who received multi-million dollar investment from angel investors such as Tim Draper, there was no infrastructure or platform for investing in cryptocurrencies.

Given that the price of bitcoin in 2013 was still above $100, the investor would have had to have invested in early 2010, or 2011 when exchanges were not available in the country. At the time, investors used brokerages and peer-to-peer platforms like LocalBitcoins to purchase or sell bitcoin.

The investor was featured on various TV networks and mainstream media outlets, as he discussed the nature of his investment in bitcoin and discussed the money he has earned.

But, shortly after the publication of several articles about the investor, the market began to question the taxation policy of South Korea and whether the $22 million return as disclosed by the investor can be taxed.

The South Korean government has previously announced that bitcoin and cryptocurrency investments are subject to taxes according to existing regulations, and investors may be requested to pay capital gains tax along with corporate tax for their investments in bitcoin.

Uncertainty in the South Korean market in regards to regulatory frameworks and policies has led cryptocurrency investors to be significantly more cautious in disclosing their earnings and their involvement in the bitcoin exchange market.

The investor’s story has once again demonstrated the importance of privacy, ensuring that gains are not disclosed in public.

The egotistical decision of the investor could become an expensive lesson but is an important lesson for the entire South Korean bitcoin community as it encourages the community to reconsider the consequences of not complying with tax laws.

As Simon Black, a successful investor and the founder of Sovereign Man, wrote:

“They’ll find a prominent Bitcoin person, someone that’s polarizing to the public – like ‘pharma bro’ Martin Shkreli. It will be a very public trial… and they’ll throw his ass in the slammer. Governments always do this because they want to scare people.”

The South Korean government could carry out a similar operation against the investor or any investor that comes out to the public and admits multi-million dollar untaxed gains on national television.

coinjournal.net

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