Lawmakers in the US have put forward a bill aimed at streamlining digital asset taxation, while South Korea encounters mounting criticism regarding its upcoming cryptocurrency tax policies. The newly introduced ADAPT Act seeks to create varied tax regulations depending on how individuals utilize cryptocurrencies. Concurrently, South Korean specialists contend that the nation’s current system fails to account for several prominent blockchain operations.
On September 30, Senator Steve Daines proposed the Adjusting Digital Asset Principles Tax Act. The US Senate formally presented the measure on October 7, detailing modifications that will impact taxpayers, commercial enterprises, and tax oversight bodies.
This legislation would apply conventional investment tax frameworks to comparable cryptocurrencies. Additionally, it establishes distinct guidelines for activities exclusive to distributed ledger networks, such as network fees and stablecoin transactions.
ADAPT Act Targets Stablecoin Payments and Blockchain Fees
Under the ADAPT Act, eligible dollar-pegged stablecoin transactions would be exempted from capital gains assessments when consumers buy products or services. At present, American tax policy classifies digital assets as property, obligating taxpayers to determine gains or losses whenever they spend them.
The measure also tackles minor blockchain transfer costs. The bill would allow users to bypass reporting gains or losses on cryptocurrencies valued at USD 10 or less when covering network expenses.
Beyond retail purchases, the draft legislation revises guidelines governing mining, staking, crypto lending, and philanthropic contributions. These updates address functions that deviate from standard investment trades.
At the same time, the measure expands wash-sale restrictions to include cryptocurrencies. These regulations typically bar investors from claiming particular losses if they swiftly buy back virtually identical assets.
Furthermore, qualified digital asset dealers and brokers would have the option to adopt mark-to-market accounting. This approach determines profits and deficits utilizing year-end market valuations, even in the absence of actual sales.
US Tax Reporting Requirements Add Pressure on Investors
According to a recent Bloomberg report, these proposed updates coincide with the United States rolling out Form 1099-DA reporting standards. Intermediaries must begin filing specific digital asset transactions starting with 2025 activity, though initial filings will exclude cost-basis details.
Consequently, investors are still required to compute their actual taxable gains and deficits. The absence of transaction histories can complicate this undertaking, especially for users who execute trades across multiple exchanges.
An August study conducted by Awaken Tax surveyed 1,000 American cryptocurrency holders. Among participants who requested or intended to request an extension for their tax filings, 21% stated they lacked essential data from platforms.
Additionally, roughly one out of every five participants voiced uncertainty over whether their Form 1099-DA accurately portrayed their trading background.
South Korea Faces Calls to Reform its Crypto Tax Framework
South Korea intends to launch its cryptocurrency taxation system in 2027 following years of development that began in 2020. Even so, sector stakeholders assert that the existing terms neglect to differentiate among various origins of digital asset earnings.
The scheduled mandates would levy a 20% tax on qualifying annual profits exceeding roughly USD 1,810. The system categorizes proceeds originating from digital asset transfers and lending activities as miscellaneous earnings.
During an October 6 parliamentary review, Deputy Prime Minister Lee Hyoung-il stated that regulators would collect feedback from politicians, industry members, and subject-matter experts.
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Kim Min-seung, who heads research at Digital X, expressed disapproval of the framework’s restrictive approach toward losses and transfers. He pointed out that American regulations already offer structures to balance profits against deficits.
As Kim highlighted, South Korea similarly lacks comparable provisions permitting the carry-forward of specific investment setbacks. He maintained that the current drafts concentrate predominantly on trading executed via domestic platforms.
In a similar vein, Dongguk University professor Hwang Seok-jin advocated for segmented tax policies determined by economic function. He singled out staking, mining, lending, airdrops, decentralized finance, and stablecoin payments as separate operations.
Hwang also suggested enacting a Digital Asset Basic Act prior to implementing any taxation. Such a law would define asset categories, business types, and transaction varieties before authorities mandate tax liabilities.
Final Thoughts
The ADAPT Act outlines targeted US cryptocurrency tax provisions encompassing transactions, network fees, investment practices, and reporting duties. Meanwhile, South Korea faces pressure to modify its prospective 2027 structure. Industry analysts persist in demanding greater clarity in asset categorization, equitable loss accounting, and tax benchmarks that correspond to diverse blockchain functions.
