Ahead of the parliamentary elections, both major political parties in South Korea promised local investors to pass laws that would stimulate the development of the crypto industry.

The opposition Democratic Party of the Republic of Korea was the first to say it would allow financial institutions to launch spot exchange-traded funds (ETFs) linked to cryptocurrencies. ETFs will be available to retail investors – people will be able to purchase shares while being tax-free. If they win the election, the Democrats also intend to expand tax breaks for crypto investors, namely: raising the threshold for tax-free income from cryptocurrency transactions from 2.5 million won (about $1,845) to 50 million won (about $36,927).

The ruling People Power Party responded by promising to focus on strengthening the protection of crypto investors and to reflect these measures in legislation. Pro-government politicians say they will abolish taxation of cryptocurrency investments from January 2025.

“Both the ruling and opposition parties are under the illusion that if they campaign in favor of crypto assets, they will attract more young voters,” said Lee Byung-wook, professor of digital finance at the Seoul School of Integrated Science and Technology. Byung-uk).

In early April, South Korean regulators announced the imminent introduction of stricter rules for listing new altcoins on centralized cryptocurrency exchanges.