South Korea Invests 3B Won in AI Tax Tracking After Coinbase Draws Heat Over System Strain - Crypto Economy

TL;DR

• South Korea allocates 3 billion won to build an AI-driven system that tracks cryptocurrency profits ahead of new tax rules set for 2027.
• The platform will analyze blockchain transactions and detect suspicious patterns linked to tax evasion.
• At the same time, debate grows in the United States after accusations that Coinbase may be influencing discussions around tax exemptions for small crypto payments, particularly those involving stablecoins.

South Korea continues advancing regulatory tools as governments try to incorporate digital assets into existing tax systems while allowing the sector to expand.

South Korea Expands AI Tax Tracking For Digital Assets

South Korea’s National Tax Service has started developing a monitoring platform powered by artificial intelligence to track cryptocurrency profits across exchanges and blockchain networks. The project carries a budget of 3 billion won, around $2 million, and prepares the country for digital asset taxation scheduled for January 1, 2027.

The agency opened a procurement process to select a technology provider capable of building the integrated platform. Officials expect the contract to be finalized soon, with system design beginning in April.

A pilot phase is planned for November, followed by a possible full launch in December. The timeline allows authorities to test the infrastructure before the new tax framework takes effect.

The platform uses machine learning models to flag unusual transaction patterns. By mapping activity across wallets and exchanges, the system aims to identify undeclared gains or behavior linked to tax avoidance.

Authorities may also share data with institutions such as the Bank of Korea and the Korea Customs Service to improve oversight of cross-border crypto transactions.

Once the rules apply, annual gains above 2.5 million won will face a combined 22% tax rate that includes both national and local levies.


Coinbase Debate Reignites Crypto Tax Policy Questions

The policy debate in the United States intensified after claims that Coinbase encouraged lawmakers to consider tax exemptions limited to stablecoins used in small purchases. Critics argue that restricting exemptions could slow the everyday use of decentralized currencies.

Executives from Block, Inc., the payments firm founded by Jack Dorsey, support broader “de minimis” exemptions that would treat transactions using Bitcoin similarly to foreign currency payments.

Industry figures such as Adam Back, CEO of Blockstream, argue that tax rules still struggle to adapt to decentralized financial systems. He notes that stablecoins like USD Coin usually generate minimal gains, unlike more volatile assets.

South Korea’s AI initiative shows how governments attempt to balance regulatory oversight with the continued growth of digital asset markets, a challenge that is becoming more relevant as global crypto adoption expands.