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Author Topic: Rich Koreans Withdrawing Huge Amounts of Won from Banks  (Read 935 times)
beetcoin
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August 05, 2014, 05:24:36 AM
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south korea is very technologically adept.. probably one of the most technology-friendly countries in the world. now with these new tax laws, it seems like they are flocking to gold.. and possibly bitcoin?

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A lot of wealthy people in Korea have been withdrawing billions won from banks recently, a so-called “exodus of money.” This money exodus started one or two years ago, and has been proven by the statistics of the Bank of Korea.

According to the statistics of Bank of Korea, individual or corporate accounts with amounts greater than 500 million won (US$484,470) in commercial banks have constantly increased, to a total of 79,940 accounts in 2011. The amount, however, started to decrease from 2012, and there were only 72,400 such accounts last year. The total balance of those accounts increased by 80 trillion won (US$77.5 billion) within one year of 2010, but decreased by 13.7 trillion won (US$13.2 billion) last year.

Wealthy people have three major reasons for this withdrawal trend. The first one is that the Foreign Account Tax Compliance Act (FATCA), started by the U.S. government in July, is effective in Korea as well. FATCA requires financial companies to report the names and account balances of overseas financial accounts, if U.S. citizens or permanent residents have them, to the U.S. tax authority. As the automatic exchange of tax information between Korea and the U.S. was concluded, Korean financial institutions should report the list of U.S. clients with more than US$50,000 (51.6 million won) in assets to the US government. If unreported overseas assets are revealed, the U.S. government imposes multi-million dollar fines. Accordingly, rich US citizens and permanent residents who live in Korea have moved their assets to gold or commercial real estate.

The second reason is that the targets of aggregate taxation on financial income expanded to people who have more than 20 million won (US$19,397) of financial income annually (originally 40 million won, US$38,726). The maximum tax rate of aggregate taxation on financial income is 41.8 percent.

Considering the current one year interest rate of a savings account is around 2.7 percent, deposits of 800 million won (US$775,152) or more are imposed with an aggregate taxation on financial income. Many wealthy people are withdrawing their deposits in order to avoid taxes.

http://www.businesskorea.co.kr/article/5726/exodus-money-rich-koreans-withdrawing-huge-amounts-won-banks
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August 05, 2014, 05:42:46 AM
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Bit of a stretch to believe that this in itself will herald massive btc adoption in Korea
imho, one of their largest payment processors adding btc to payment options may be a bigger driver

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August 05, 2014, 05:59:37 AM
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i don't see how that's going to direct the demand towards bitcoin. if a lot of rich people are looking for new places to put money, in a country that is technologically advanced, it could be possible that south korea might start bringing in some more coins.
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August 05, 2014, 09:56:17 AM
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Good time for them to invest in BTC before there is a run on the banks there! Rich people start withdrawing all their money and the banks could run out of funds quickly.

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August 05, 2014, 09:59:48 AM
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the best adoption driver to bitcoin is the government
when the government takes your  hard earned money from the bank (think cyprus).... bitcoin is there is save the day
or through the hidden inflation tax

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Beliathon
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August 05, 2014, 11:58:19 AM
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the rich still dont "need" the Bitcoin
Very true, but sooner or later all people on Earth - rich and poor - will begin to realize that fiat scrip is a worthless joke.  Grin

That's when rich and poor alike begin to bail-in to Bitcoin (and possibly other cryptos), nation-state currencies fall like dominoes, and we finally reach the moon.

Remember Aaron Swartz, a 26 year old computer scientist who died defending the free flow of information.
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August 05, 2014, 07:32:30 PM
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This is interesting news and soon this will happen to other countries to because ''Big brother'' from USA want to know everything, how much money we have, what we look on Internet, messages we writes in email...
Is Bitcoin solution for this people?
I really can see that Bitcoin will give so needed protection and security for average people in the world regarding finance in the near future Smiley

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August 05, 2014, 07:37:58 PM
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It is just US-linked people running away from taxes.

Soon most of the money will reapear in another country with not that many shared economic informations with USA
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