Korea Digital Asset (KODA) Witnesses Significant Growth in Crypto Assets Under Custody
Korea Digital Asset (KODA), the largest institutional crypto custody service in South Korea, has experienced a remarkable surge in the value of crypto assets under its custody. In the second half of 2023, the value of these assets expanded by nearly 248%, reaching approximately 8 trillion Korean won ($6 billion) by the end of last year. This represents a substantial increase from the 2.3 trillion won recorded at the end of June 2023.
KODA: South Korean Investors Turn to Custodians
South Korea currently imposes restrictions on institutions and corporations, preventing them from directly investing in crypto through exchanges. However, crypto custodians like KODA have provided institutional investors with a regulated avenue for managing their crypto assets. KODA has achieved significant market share in the local crypto asset custody sector, reaching 80% by June 2023.
- KODA currently serves approximately 50 corporate clients and manages over 200 wallets.
- The demand for crypto custody services is expected to continue rising in the future.
- This increase in demand is driven by recent announcements by both ruling and opposition parties in South Korea, pledging to launch local spot Bitcoin exchange-traded funds (ETF) as part of their election promises.
Ruling Party Seeks Crypto Tax Delay as Election Promise
The ruling People Power Party in South Korea has requested a two-year postponement of taxation on gains from cryptocurrency investments as a potential campaign promise. The party aims to prioritize establishing a comprehensive regulatory framework for cryptocurrencies before implementing taxation measures. As part of its election campaign strategy, the ruling party is considering introducing a bill that encompasses essential elements for potential crypto regulations, including requirements for crypto custody providers and guidelines for token listing. These regulations would supplement South Korea’s initial set of crypto regulations set to become effective in July.
- The current tax plan imposes a 22% tax rate on crypto gains exceeding 2.5 million Korean won.
- Gains from stocks are only taxed when they surpass 50 million won.
Hot Take: Positive Developments for the Crypto Industry in South Korea 🚀
The significant growth in crypto assets under custody by KODA highlights the increasing interest and adoption of cryptocurrencies among institutional investors in South Korea. With restrictions on direct investment through exchanges, custodians like KODA play a crucial role in providing regulated and secure solutions for managing crypto assets.
Furthermore, the promises made by both ruling and opposition parties to launch local spot Bitcoin ETFs and lift the ban on institutional investments in crypto demonstrate a positive shift in the regulatory landscape. These developments, along with the potential delay in crypto taxation, indicate a favorable environment for the growth and development of the crypto industry in South Korea.
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