South Korea's Taxable Cryptocurrency Activities Reach Approximately 15 Trillion Won, Ranking 11th Among Analyzed Countries

The scale of South Korea's taxable cryptocurrency activities has ranked among the top in the world, according to a report.

According to Chainalysis's "Crypto Tax Report" released on August 31, the global on-chain taxable cryptocurrency activities are estimated to exceed $457 billion by 2025. South Korea recorded a total of $10.9 billion, ranking 11th among the analyzed countries.

The report categorized taxable on-chain activities into profits, income, and payments. Profits include realized gains from centralized and decentralized exchanges. Income comes from mining, staking, lending, and gambling. Payments encompass flows related to store services and peer-to-peer transactions.

Regionally, North America topped the list with $134.6 billion, followed by the European Union with $125.1 billion. East Asia recorded $54.7 billion.

By country, the United States ranked first with $112.6 billion. Germany had $24.1 billion, while China recorded $21 billion. The United Kingdom reported $19.4 billion, and India accounted for $19 billion. South Korea's total of $10.9 billion includes $2 billion in income, $3.2 billion in profits, and $5.6 billion in payments.

South Korea also recorded a 144% ratio of taxable cryptocurrency activities compared to government deficits, with Portugal having the highest at 201%. Switzerland was at 100%, Thailand at 78%, and Greece at 67%. This comparison utilized data from the International Monetary Fund.

In terms of government revenue, the presence of developing countries was notable. Nigeria's taxable cryptocurrency activities amounted to $4.4 billion, representing 12% of government revenue of $35.5 billion. Thailand's $12.5 billion accounted for 11% of its government revenue.

However, the report clarified that these figures do not necessarily translate into actual tax revenue. Most countries do not have a 100% tax rate, and they do not collect all theoretically taxable income. Cryptocurrency taxes are known to have a particularly high non-payment rate.

A report from Sweden estimated that over 90% of individuals did not report their cryptocurrency activities. In the United States, it was reported that the difference between the tax owed and the actual amount paid for cryptocurrency-related transactions in 2022 reached approximately $50 billion, which accounted for about 8% of the total tax gap for that year.

The U.S. has begun to reduce this gap with the introduction of the 1099-DA form for reporting digital asset sales. Congressional reports estimate that this system will generate $28 billion in tax revenue over ten years. However, there are limitations to domestic reporting systems, as taxpayers can transact outside their tax residence.

The Organization for Economic Cooperation and Development (OECD) announced the Cryptocurrency Reporting Framework (CARF) at the end of 2022 to address the lack of voluntary reporting of cryptocurrency transactions. This framework is designed as a risk detection tool similar to common reporting standards in traditional finance.

CARF imposes obligations on centralized exchanges, intermediaries, and some wallet providers to collect customer information and report transactions. Dozens of countries have agreed to start exchanging information under CARF from 2027, and the number of participating countries is expected to increase thereafter.

A significant portion of global cryptocurrency transactions occurs off-chain within the ledgers of centralized exchanges. From the tax authority's perspective, this area is relatively easy to track, as platforms know their customers and can verify profits generated within the order book.

CARF also captures some on-chain activities. For example, funds flowing into or out of a centralized exchange from a personal wallet may be linked to a sale and thus become reportable. However, CARF only covered 14% of the total on-chain taxable activities, while the remaining 86% fell outside the framework's practical scope, including decentralized exchange activities, peer-to-peer transfers, and on-chain income flows and payments.

The report suggests that even with CARF data, tax authorities may not have all the key information needed to calculate taxable income. This is because it is common for taxpayers to buy cryptocurrency on one platform and transfer it to another. Many also store their assets in personal wallets before disposal or after acquisition.

CARF does not apply retroactively. Most decentralized exchanges are effectively outside its scope. It is also challenging to capture foreign platforms that have no reporting connection with CARF, including peer-to-peer transfers and self-custody activities. Mining rewards, staking income, and many payments for goods and services are also not directly captured.

There are also gaps in acquisition cost data. Even if an exchange reports a disposal, it often lacks acquisition information for cryptocurrencies purchased elsewhere. This makes accurate profit and loss calculations difficult. CARF data is also limited as it is aggregate data rather than individual transaction units.

The report clarified that it does not imply that CARF needs to be revised. It is valuable in providing information from platforms where cryptocurrency trading occurs frequently, such as centralized exchanges. However, the effectiveness of information reporting reforms is believed to increase when combined with workflows utilizing blockchain data.

By 2025, profits related to transactions on centralized and decentralized exchanges are estimated to reach $127.1 billion. This is the third-largest item in global taxable cryptocurrency activities, following peer-to-peer payments and service payments. Exchange transactions are also an area directly targeted by a reporting system similar to CARF.

Recent data has identified three trends. Realized profits from centralized exchanges have fluctuated significantly based on market conditions. Activities on decentralized exchanges have grown to a meaningful share of global taxable flows. It has also been indicated that it is possible to estimate transaction profits by specific countries. Taxable activities outside centralized exchanges have been shown to be larger than taxable activities revealed through transfers into and out of centralized exchanges.

Realized profits through centralized exchanges have followed the overall flow of the cryptocurrency market. In 2021, a strong bull market resulted in profits of $97.3 billion. In 2022, the collapse of major exchanges shook the market, recording losses of $38.1 billion. In 2023, profits returned to $4.4 billion, and in 2024, profits reached $56.4 billion. Realized profits in 2025 are expected to increase by about 13% compared to the previous year, reaching $63.7 billion.

As of early August 2026, partial aggregates showed a loss flow of $16.5 billion. The report cautioned that this should be interpreted carefully, as the year is still ongoing. The approximately 50% drop in BTC prices in 2026 also contributed to the mechanical reduction in realized profits.

The net profits of cryptocurrencies transferred to centralized and decentralized exchanges were calculated based on the average acquisition cost of assets within wallet clusters. Funds that exited the exchange were considered as sales. Transactions executed by users within centralized exchanges are not visible on the blockchain and were therefore excluded.

The report posited that transfers from personal wallets to exchanges are generally made for the purpose of selling. Therefore, it does not significantly undermine the accuracy of the research findings. However, excluding profits and losses generated from transactions within centralized exchanges and transfers between centralized exchanges may lead to observed profits and losses being recorded lower than actual values.

From a blockchain perspective, Bitcoin has consistently led the net realized profits in profitable years. Due to price trends and market capitalization effects, it accounted for more than half of the profits in 2021, 2024, and 2025. The Ethereum network made significant contributions during bull markets but also had a large share of losses during bear markets.

Other chains such as Solana, Tron, BNB Smart Chain, and Base saw increased user activity and on-chain transaction volumes, but their overall contributions remained relatively small.

This cyclicality may be important for tax authorities. Some countries limit the carryforward of losses from asset disposals. They may restrict the types of income against which capital losses can be deducted or limit the offsetting of profits and losses between different assets.

Overall trends can obscure individual results. Even in years with macro-level losses, individual taxpayers can realize significant profits. Whether a specific disposal is a profit or a loss depends not on market direction but on the acquisition cost of the asset. Some assets may move contrary to the macro trend of the year. Therefore, it is difficult to conclude that a bear market necessarily means a reduction in tax burdens.

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