The government is considering levying an education tax on cryptocurrency exchanges on the premise that they will be reclassified as financial businesses. If the Digital Asset Basic Act is enacted and crypto exchanges are brought into the regulated financial system, they could pay the education tax as existing financial firms do. With the education tax burden on the financial sector already contentious, debate is expected over whether extending it to the crypto industry is appropriate.
The government recently met with chief executives of domestic cryptocurrency exchanges and raised the education tax issue tied to reclassification as financial businesses, according to financial industry sources on the 26th. A senior government official said that if crypto exchanges move into the financial and insurance category through the legislation, there will be an education tax issue, adding that financial businesses will be given roles befitting that status. The official also said that when the crypto business was designed in 2018, it was not placed within the financial industry, and that a detailed discussion is now needed on whether to bring it in.
Under the current Korean Standard Industrial Classification, cryptocurrency trading and brokerage falls under information and communications. Because it is not classified as a financial and insurance business, it is not subject to the education tax. But if the legal status of exchanges is newly defined through the Digital Asset Basic Act, the need to adjust the industrial classification and the tax framework could arise. If exchanges are classified as financial businesses and included among education taxpayers, a new tax burden would follow.
Banks, insurers and securities firms currently pay the education tax based on operating revenue rather than profit. From this year, a rate of 0.5% applies to tax bases of up to 1 trillion won, and 1% to amounts above that. Under this structure, a company must pay the tax if it generates taxable revenue, even while posting a loss.
A Seoul Economic Daily analysis of the 2025 business and audit reports of the country's five largest cryptocurrency exchanges showed that Dunamu, the industry leader, posted operating revenue of 1.5212 trillion won. Bithumb followed with about 651.3 billion won. Coinone was tallied at 45.4 billion won, DigitalX at 9.7 billion won and Gopax at 4.3 billion won.
Applying this year's financial sector education tax rates to the full operating revenue of these exchanges, Dunamu's estimated tax would reach about 10.2 billion won. Bithumb's would be about 3.2 billion won. These are simple estimates, however, that assume exchanges are included among education taxpayers and that trading fees become exempt from value-added tax. Revenue subject to separate taxation, such as interest and dividends, and items excluded by law were not included in the calculation.
Introducing the education tax would not translate directly into higher costs for exchanges alone. Trading fees that exchanges currently collect from users include VAT. If trading services become VAT-exempt after reclassification as financial businesses, the fees borne by users could decline. Conversely, exchanges could narrow fee discounts or raise rates to offset the cost of paying the education tax.
Kim Kyung-ho, head of the digital asset center at Deloitte Anjin, said that with fee competition among crypto exchanges intense recently, the calculations could grow complicated depending on how much of the VAT exemption effect is passed through to fees.
In the financial sector, there are calls to review the current taxation method before extending the education tax to exchanges. The education tax is intended to raise funds needed to improve the educational environment and enhance treatment of teachers. But debate over the appropriateness of the levy has persisted, given that there is little direct connection between the business activities of financial firms and education financing.
The burden on financial firms has risen sharply this year in particular, as the rate applied to tax bases above 1 trillion won doubled to 1% from 0.5%. The five largest banks, which paid about 260 billion won in education tax in the first half of last year, are expected to pay around 480 billion won in the first half of this year. The National Assembly Budget Office also estimated the additional annual tax burden on the financial sector as a whole from last year's rate increase at 1.3 trillion won.
The crypto industry likewise argues that caution is needed in applying the existing tax framework as it stands. One industry official said that anyone can see there is little connection between crypto trading and education, and that the occasion calls for an overhaul of the education tax imposed on the financial sector as a whole.
Cases of friction with existing financial regulation are also emerging as cryptocurrency is brought into the regulated system. Reporting of cross-border cryptocurrency transfers, which the Bank of Korea is pursuing, is a prime example. The revised Foreign Exchange Transactions Act takes effect on Dec. 3 and imposes a reporting obligation on exchanges, but critics say it is difficult to carry out under the current legal framework.
A draft reporting manual the central bank delivered this month to the Digital Asset eXchange Alliance (DAXA) called for exchanges to submit monthly the domestic crypto holdings of any user with at least one record of an overseas transfer since July 19, 2024. The problem is that exchanges cannot arbitrarily restrict deposits and withdrawals even if a user declines to consent to providing the information. The Virtual Asset User Protection Act prohibits blocking deposits and withdrawals without justifiable cause.
The central bank met with exchange officials on the 16th to discuss the issue. A Bank of Korea official said the bank is consulting with the Ministry of Finance and Economy with all options open, including narrowing the scope of balance reporting as much as possible and carrying it out only when necessary, and that with the Dec. 3 effective date approaching, it will seek to finalize the details in November. As disputes over the education tax and foreign exchange reporting continue, the industry is calling for existing financial regulation to be overhauled in light of the characteristics of cryptocurrency.