South Korea is weighing a proposal to reclassify cryptocurrency trading platforms as financial institutions under a new digital asset law, a shift that could expose major exchanges like Upbit and Bithumb to billions of won in annual education taxes calculated directly on their operational revenues rather than profits, asarabictrader.com reported.
Reclassifying Exchanges as Financial Institutions
The legislative pivot sits at the center of ongoing consultations regarding the upcoming “Fundamental Law on Digital Assets.” At present, digital asset exchanges operate within the information and communications sector, which keeps them entirely exempt from South Korea’s education tax. Shifting their legal status to mirror traditional financial institutions would instantly pull them into a completely different regulatory and tax ecosystem.
This education tax is not levied against net profit. Instead, the statutory calculation targets taxable revenue directly. The rate is set at 0.5% for the taxable base up to one trillion won, scaling up to 1% for any portion exceeding that threshold. Because the assessment ignores operational losses, trading platforms would face these steep liabilities even during severe market downturns.
Revenue Scale and Potential Tax Liabilities
Operational data from 2025 highlights the sheer volume of capital exposed by the proposed reclassification. Dunamu, the operator of the Upbit platform, recorded operational revenues of 1.5212 trillion won last year. Under the proposed tax structure, its annual bill could climb to approximately 10.2 billion won.
Bithumb sits behind Dunamu with operational revenues reaching roughly 651.3 billion won for the same period, translating to an estimated potential tax burden of about 3.2 billion won. Smaller domestic players face proportionally smaller yet significant figures. Coinone posted revenues of 45.4 billion won, while Digital X and JobKiss recorded revenues of 9.7 billion won and 4.3 billion won respectively.
| Platform Operator | 2025 Operational Revenue | Estimated Annual Education Tax |
|---|---|---|
| Dunamu (Upbit) | 1.5212 trillion won | ~10.2 billion won |
| Bithumb | ~651.3 billion won | ~3.2 billion won |
| Coinone | 45.4 billion won | Unspecified |
| Digital X | 9.7 billion won | Unspecified |
| JobKiss | 4.3 billion won | Unspecified |
Exact financial outcomes remain estimates. Final obligations depend heavily on the final statutory language defining taxable revenues and how the government ultimately decides to treat trading fees. Any subsequent adjustments to the value-added tax framework could also directly alter the fee structures absorbed by everyday users.
Broader Regulation and Investment Tax Timelines
The education tax discussion runs parallel to the finalization of the Fundamental Law on Digital Assets itself. That legislation targets comprehensive market reform, establishing strict rules for platform oversight, the mandatory licensing of digital asset service providers, and formal supervision over the issuance of won-denominated stablecoins.
Meanwhile, the timeline for taxing individual cryptocurrency investment gains remains a separate point of contention. The existing schedule mandates a 22% overall tax on annual gains exceeding 2.5 million won starting in January 2027. However, lawmakers are actively pushing to postpone that implementation until 2029.
South Korea is advancing a sweeping overhaul of digital asset oversight, leaving the exact financial obligations of exchanges tied directly to how lawmakers choose to define their corporate identity.
