Korea Digital Asset (KODA), the leading institutional crypto custody service in South Korea, has experienced a significant surge in the crypto assets it manages.
The company disclosed that the total value of crypto assets under its custody surged by almost 248% during the latter half of 2023.
Established through a partnership between major Korean bank KB Bank, crypto venture capital firm Hashed, and blockchain technology firm Haechi Labs, KODA reported that the value of these assets reached approximately 8 trillion Korean won ($6 billion) by the conclusion of the previous year.
This marked a substantial increase from the 2.3 trillion won recorded at the end of June 2023.
KODA: Custodial Services Gain Traction Among South Korean Investors
In South Korea, regulations currently prohibit institutions and corporations from directly investing in cryptocurrency through exchanges. However, institutional investors have found a regulated avenue for managing crypto assets through custodial services.
According to KODA, their dominance in the local crypto asset custody sector has reached 80% as of June 2023. The company serves around 50 corporate clients, managing over 200 wallets.
KODA predicts that the demand for crypto custody services will continue to increase in the future. This projection follows recent announcements by both the ruling and opposition parties in South Korea, promising to introduce local spot Bitcoin exchange-traded funds (ETFs) as part of their campaign pledges ahead of the general election on April 10.
Lee Bok-hyun, head of South Korea’s Financial Supervisory Service, plans to visit the United States soon to discuss the crypto industry with U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler. The focus of their discussion will be on spot Bitcoin ETFs.
Both political parties have also committed to lifting the ban on institutional investments in cryptocurrency.
South Korea’s ruling People Power Party is advocating for a two-year delay in the taxation of profits from cryptocurrency investments as part of a potential campaign pledge.
The ruling party is advocating for a postponement of cryptocurrency taxes as part of its election pledge.
Recently, South Korea’s ruling People Power Party proposed a two-year delay in taxing profits from cryptocurrency investments as part of its electoral agenda. Their primary objective is to prioritize the establishment of a robust regulatory framework for cryptocurrencies before implementing taxation policies.
As a strategic move in their election campaign, the ruling party is contemplating the introduction of a legislative bill that encompasses fundamental components for potential crypto regulations. These regulations may entail stipulations for crypto custody providers and criteria for token listings.
If these regulations are enacted, they would complement South Korea’s initial crypto regulatory framework, which is scheduled to take effect in July. Presently, the taxation scheme levies a 22% tax rate on cryptocurrency profits exceeding 2.5 million Korean won, whereas gains from stocks are taxed only when they surpass 50 million won.
Additionally, in December of the previous year, South Korea announced a mandate requiring high-ranking public officials to disclose their cryptocurrency holdings starting the following year.
