Why SK Square’s planned crypto launch comes with a warning

Saif Naqvi
South Korea crypto
Source: Pixabay

SK Square, the investment vehicle of one of the largest family-run conglomerates in South Korea, SK Group, is planning on issuing a cryptocurrency. The decision comes during an exciting time for the crypto landscape in South Korea, with the recently elected President Yoon Suk-yeol promising to embrace the use of digital assets.

This is not SK Square’s first interaction with crypto. The firm ventured into the metaverse in December by detailing plans to launch a virtual space called ‘ifland’. At the time, Managing Director Huh Seok-Joon said that their customers should be able to use cryptocurrencies for shopping, streaming media, and other transactions with the metaverse community. The announcement had come soon after the firm poured a $76 Million investment in South Korea’s fourth-largest crypto exchange – Korbit.

With South Korean President-elect Yoon Suk-yeol set to take office in May, many analysts expect the country to be a serious contender as a crypto hub in East Asia. The newly elected President made cryptocurrencies a central theme to his campaign, vowing to allow initial coin offerings and erasing crypto-related tax for profits earned up to $40,000.

However, the regulatory landscape is not crystal clear just yet. The South Korean National Assembly has shifted its crypto stance multiple times over the past few years, citing crypto as a threat to national security but also understanding its growing importance to the economy. The indecision in crypto policies delayed a proposed 20% crypto tax law by an entire year.

While Yoon Suk-yeol can implement bits of his cryptocurrency policy through presidential orders, tax-related changes would need to be passed by National Assembly. Ergo, South Korea’s crypto stance is still vague, despite the promises made by the President-elect. Will he follow up with his plan of action? Only time will tell. However, some of South Korea’s largest business houses, such as SK Group, would directly stand to benefit should the environment become more crypto-friendly.