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So, please sit back, relax, and enjoy today&#39;s news, knowing that it&#39;s made possible by our friends at Sygnum.<img src="https://media.licdn.com/dms/image/D5612AQF6FqV3FJ6lCQ/article-inline_image-shrink_1500_2232/0/1712659504392?e&#61;1718236800&amp;v&#61;beta&amp;t&#61;c6m5o551-zHWXUFPn_e46HFMDTNQzYUYOrevruQAyWA" /><a href="https://www.blockhead.co/tag/south-korea/" rel="noopener noreferrer nofollow">South Korea</a> has made no qualms about leveraging cryptocurrency for political support. With the parliamentary election set for tomorrow, 10 April, parties are promising crypto-friendly policies to boost their campaigns.President Yoon Suk Yeol’s People Power Party (PPP) has vowed to delay a digital asset tax for a second time. The virtual asset taxation regime was already pushed back from January 2023 to January 2025. Another delay could postpone the tax plan to start in 2027.Meanwhile, the opposition Democratic Party (DPK) is pledging to lift regulations on ETFs, including spot Bitcoin ETFs. &#34;We’re going to allow the ETFs, whether domestic or overseas,” Democratic Party policy specialist Hwanseok Choi <a href="https://news.bitcoin.com/south-koreas-democratic-party-to-introduce-etf-and-digital-finance-reforms/?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">said</a>.More than 10% of South Korea&#39;s population participated in the country&#39;s crypto market via registered exchanges in the first half of 2023, making up a considerable potential voting pool.“A close election is a given,” <a href="https://www.coindesk.com/policy/2024/04/09/south-koreas-april-10-election-whats-at-stake-for-the-crypto-universe/?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">said</a> Abel Seow, the Seoul-based BitGo Asia-Pacific director. “But it’s hard to say whether crypto will be a deciding factor. What I can say is that with the passage of time and each cycle, the market has become bigger and bigger.&#34;&#34;Not only the involvement of investors but also traditional corporations. So, at some stage when these traditional corporations come in, and they have a crypto angle, elections could be impacted by the space.”However, how sincere are these politicians&#39; pledges and are they overlooking key concerns?<h3 id="young-wild-not-so-debt-free">Young, Wild &amp; Not So Debt Free</h3>Cryptocurrency is cool and resonates well with the youth of today. According to a recent report by <a href="https://www.blockhead.co/tag/independent-reserve/" rel="noopener noreferrer nofollow">Independent Reserve</a>, much of the crypto adoption in Singapore is driven by Gen Zs (18-25 year olds) with ownership growing from 38% to 47% between 2021 and 2024.However, over in South Korea, crypto investments are <a href="https://cryptonews.com/news/south-korean-youth-crypto-investment-driving-many-to-debt-report.htm?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">leading</a> young people to bankruptcy courts.The Seoul Rehabilitation Court&#39;s <a href="https://www.hani.co.kr/arti/society/society_general/1135427.html?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">report</a> on debt-related cases for the Financial Year 2023 shows that there was a 31% rise in personal rehabilitation” applications last year.&#34;Crypto investment&#34; and &#34;stock market purchases&#34; were a driving cause for these cases for people aged 20-29.South Korea&#39;s rehabilitation system allows those who cannot repay their debt to avoid bankruptcy if they commit to court-assigned debt repayment programs.Applications for such rehabilitation have &#34;steadily increased&#34; over the past few years among people in their 20s, the Seoul Bankruptcy Court stated.10.3% of rehabilitation applicants were aged 20-29 in the first half of 2021. This percentage has risen to 17% in the second half of 2023.The rise is “the result of the expansion of economic activities for people in their 20s, including cryptocurrency and stocks,” the court concludes.It&#39;s not a fresh discovery either. The court made a similar finding in October 2023, <a href="https://cryptonews.com/news/youth-insolvency-spikes-south-korea-rise-crypto-investment-blame.htm?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">stating</a> that “a rise in [insolvency] among young people seems to have been influenced by a growth in economic activities such as cryptocurrency and stock market investment.”Rising house prices and high unemployment rates have been attributed to the increase in young people turning to crypto.However, the unemployment rate among those aged 15 to 29 has steadily fallen over recent years to its lowest in more than a decade at just 5.9%.With the government&#39;s pledges to make crypto freer, reckless regulation might not be the best route for helping young people.<h3 id="salty-about-kimchi">Salty About Kimchi</h3>Korea has a notoriously high premium on crypto trading. The phenomenon known as the <a href="https://www.blockhead.co/tag/kimchi-premium/" rel="noopener noreferrer nofollow">&#34;Kimchi Premium&#34;</a> is used to describe the phenomenon when cryptocurrencies trade at higher prices on South Korean exchanges compared to the rest of the world.Last month, the premium returned to its two-year high of 10% as <a href="https://www.blockhead.co/tag/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> broke above its previous record.At the time of writing, Bitcoin is priced at $69,918.08 on <a href="https://www.blockhead.co/tag/coinbase" rel="noopener noreferrer nofollow">Coinbase</a> but $70,358.25 on Korean exchange <a href="https://www.blockhead.co/tag/upbit/" rel="noopener noreferrer nofollow">Upbit</a>. The percentage difference accounts for less than a percentage but it&#39;s known to be even more volatile than Bitcoin itself.<img src="https://media.licdn.com/dms/image/D5612AQGxVRBmu1m0Tw/article-inline_image-shrink_1500_2232/0/1712659504372?e&#61;1718236800&amp;v&#61;beta&amp;t&#61;XKE-JY4haGW2HEjBHZe2QZt6GbtdXCr5-zlOYbkbYG4" />The discrepancy occurs due to high demand for crypto - in this case, Bitcoin - and limited trading options due to regulator restrictions and capital controls.Only Korean nationals and foreign residents with a resident registration card can make transactions through exchanges in Korea, effectively banning foreigners and corporations from trading.So far, the political campaign promises have not tackled the Kimchi Premium, which could be driving local crypto users to park their money on foreign exchanges.<h3 id="helping-exchanges">Helping Exchanges</h3>Although one can never truly trust a politician&#39;s promise, regulators usually don&#39;t mess around. South Korea&#39;s financial authorities are releasing <a href="https://cointelegraph.com/news/south-korea-tougher-rules-crypto-exchange-listings?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">new guidelines</a> for imposing tighter regulations for token listings on centralized crypto exchanges.Intended to be enforced by the end of April or early May at the latest, tokens with hacking incidents will be prohibited from being listed unless the cause has been comprehensively investigated.Foreign digital assets on South Korean exchanges require a white paper or technical manual published for local markets in order to be listed on domestic exchanges too.That said, tokens that have existed on licensed exchanges for more than two years need not comply.The move comes as South Korea&#39;s Financial Intelligence Unit found 49% more suspicious transactions on domestic crypto exchanges in 2023 compared to 2022.Meanwhile, crypto exchange Crypto.com has <a href="https://crypto.com/company-news/crypto-com-app-set-for-launch-in-south-korea?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">announced</a> that it is launching the Crypto.com App in South Korea, which will allow local retail users to trade cryptocurrencies.Users will have access to more than 150 cryptocurrencies on the platform as well as exclusive NFT projects via Crypto.com, as well as its educational materials on Crypto.com University.“We are incredibly excited to be launching the Crypto.com App for retail users in South Korea – a market of tremendous importance to the growth of our business, and one in which consumers are very interested in crypto,” said Eric Anziani, President and Chief Operating Officer of Crypto.com.“South Korean regulators are thoughtfully advancing the sector and we look forward to continuing to collaborate with them to help grow the industry responsibly.”Cleaning up exchanges is another task not directly mentioned in the upcoming elections. While the task ultimately falls on regulators, balancing the &#34;crypto-friendly&#34; environment pushed by politicians might not be as easy as promised.

Is South Korea Politicizing Crypto at the Expense of its Users?

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