Surge in Cryptocurrency Gifting to Minors in South Korea
In South Korea, there has been a significant surge in the gifting of cryptocurrencies to minors, with the value of these gifts skyrocketing to approximately 4.03 billion won (around $2.8 million) in 2025—marking a remarkable 2.7-fold increase from the previous year. This analysis stems from data acquired by Jung Tae-ho, a lawmaker from the Democratic Party, through the National Tax Service, revealing that the number of cryptocurrency gifts given to individuals aged 18 and below jumped from 53 in 2024 to 103 in 2025, according to a report by News1 on September 9.
Trends Among Younger Minors
Notably, the trend is particularly pronounced among younger minors, as gifts directed towards children aged 11 years and under rose from 28 instances in 2024 to 65 in the following year. The financial value of these young recipients’ gifts experienced an impressive increase, tripling from 774 million won to 2.35 billion won. In total, across all age demographics, the National Tax Service logged 423 instances of inheritance and gift transactions tied to cryptocurrencies, accumulating to a substantial 45.86 billion won in assessed value.
Government Monitoring and Tax Reforms
As the South Korean government gears up to enhance its monitoring capabilities for crypto assets linked to inheritance and gift taxes, a new reform plan is in motion. Starting in 2026, major virtual asset platforms like Upbit and Bithumb will be incorporated into the official inquiries conducted by the National Tax Service, thereby expanding the scope of their financial asset investigations. This adjustment aims to ensure that tax authorities can trace cryptocurrencies just like any conventional financial holdings, beginning January 1, 2027.
The Tax Service has indicated plans to foster stricter scrutiny and management of tax obligations pertaining to virtual assets, particularly in light of the increasing complexity associated with cryptocurrency transactions. In August, officials highlighted intentions to deploy sophisticated tracing software that could assist in tracking transactions across different wallets, aiming for better oversight amidst the challenges posed by private cryptocurrency holdings.
Implications of New Tax Guidelines
As digital asset transactions rise—particularly pertaining to familial wealth transfers—lawmakers spotlighted the need for a thorough understanding of these gifts to facilitate appropriate tax regulations. This restructuring aligns with South Korea’s forthcoming introduction of a crypto income tax framework set to launch in 2027, where any annual profit exceeding 2.5 million won from cryptocurrency will be subject to a 20% national tax and up to 22% when local taxes are included.
Preparations for the new tax guidelines indicate that gains from cryptocurrencies, regardless of whether they were held on local exchanges or private wallets, will be captured under tax laws—a broadening of prior primarily domestic asset legislation. This new income tax structure remains controversial, with attempts from opposition parties to postpone its implementation until 2030; however, unless alterations are made, this tax will take effect in 2027 with initial filings expected by May 2028.
Tax Obligations for Cryptocurrency Gifts
Despite upcoming tax changes, South Korean citizens are required to declare any cryptocurrency gifts as taxable and will follow similar evaluation procedures applicable to other forms of property transfers. The valuation for crypto gifts will derive from the average trading prices over a designated period around the gift date, rather than solely on the immediate market value at the time of transfer, which could result in tax assessments varying significantly based on market fluctuations over time.
