South Korean investors share 1x offshore futures strategy as 2027 crypto tax nears

In short

• South Korean investors are sharing a 1x long offshore perpetual futures strategy to reduce tax, The Herald Business reported on 16 October 2026, the only outlet to report it so far.
• The digital asset tax starts on 1 January 2027 at a 22% effective rate on gains above 2.5 million won ($1,856).
• The FSC and FSS issued an investor alert the same day, saying such perpetual futures are not permitted in South Korea.
• Registered Korean exchanges lost 35% of their won deposits in the first half of 2026, according to Cryptopolitan.

South Korean investors are sharing a strategy to trade offshore crypto perpetual futures instead of spot Bitcoin, as the country's digital asset tax approaches, The Herald Business reported. Citing industry sources on 16 October 2026, the report said investor communities have recently been circulating what they call a "1x long strategy on offshore exchange futures".

Perpetual futures are derivatives without a contract expiry date, so a position can be held open and traded at any hour of the day. The strategy being shared has an investor go long, betting that prices will rise, on offshore platforms such as Binance and Bybit with leverage of 1x, rather than buying Bitcoin spot on South Korean exchanges.

The 1x offshore futures strategy

Under the plan, the levy begins on 1 January 2027 at an effective rate of 22%, comprising a 20% base rate and a 2% local tax, and covers annual digital asset gains above a basic deduction of 2.5 million won ($1,856), according to The Block. It applies to income from selling, transferring and lending crypto assets. The measure has been postponed three times since it was first discussed in 2022.

A 22% tax from January 2027

The Herald Business report describes a tax-saving gap: under the current income tax law, taxable income next year covers gains from buying and selling digital asset spot holdings or lending them out, and because the law uses an enumerated approach, profits from offshore perpetual futures are not explicitly listed as taxable. An industry official told the outlet that the sharing of avoidance methods even before the tax takes effect is itself a sign of trading volume shifting away, and added that once taxation begins, the flow of users to offshore exchanges could accelerate.

Regulators warn products aren't permitted

South Korean financial authorities issued an investor alert on perpetual futures trading on 16 October 2026, the same day, according to Bloomingbit. The Financial Services Commission and the Financial Supervisory Service said offshore perpetual futures platforms tied to South Korean stocks and stock indexes that run an illegal domestic business will face a crackdown, with steps that could include criminal complaints to investigating agencies if they breach the rules by recruiting Korean investors or soliciting trades through referral codes. The authorities said these perpetual futures have no institutional permission in South Korea, and warned that many offshore products carry leverage of 10 times to 200 times, so a small adverse price move can wipe out the whole investment.

Deposits fall 35% as money moves

The money is already moving. In the first half of 2026, South Korea's registered crypto exchanges lost 35% of their won deposits and a third of their market value, Cryptopolitan reported. Figures from Tiger Research and Chainalysis, cited by Businesskorea, put cumulative trading in perpetual futures linked to SK hynix at roughly $4bn, from about 1,000 South Korean investors, since those products began trading abroad. Bitcoin perpetual futures were the largest, at about $7.2bn from November 2024 to July 2026.

The tax gap has drawn political attention too. CoinNess, citing KBS News, reported that South Korea's Ministry of Economy and Finance has neither sent nor received official documents from the Financial Services Commission on the taxation of crypto derivatives traded on overseas exchanges since 2022. Lawmaker Kim Sang-hoon obtained the ministry's materials as the gap emerged before next year's virtual asset tax rollout. A petition to postpone the crypto tax by two years reached the 50,000-signature threshold required for legislative review, The Block reported, while Lee Hyoung-Il, a nominee for the Minister of Economy and Finance, said the plan is on schedule and the National Tax Service will publish detailed tax standards later this year.

What investors are saying

Investors on X reacted with a mix of caution and resignation. CoinScoop said the tax interpretation is not yet clear, so it seems safer to wait for confirmed standards than to follow the strategy, and noted the start date could change. Another user, 코인정규직, said workarounds will keep appearing, while 몽몽 said there is no rush because investors are already deep in losses.

It isn't clear yet whether offshore perpetual futures gains will stay outside the tax net. The FSC alert says these products are not permitted in South Korea, and any decision on whether to allow them in future, and how to regulate them, will be made after reviewing investor protection, spillover effects on the domestic market and overseas discussions, according to Bloomingbit.

Questions readers ask

What is South Korea's crypto tax rate and start date?

South Korea's digital asset tax is due to start on 1 January 2027, applying a 22% effective rate, made up of a 20% base rate plus a 2% local tax, to annual gains above a 2.5 million won ($1,856) basic deduction, according to The Block.

Why are Korean investors using offshore perpetual futures?

The Herald Business reported that investor communities are sharing a 1x long strategy on offshore exchanges such as Binance and Bybit instead of buying Bitcoin spot in South Korea, because profits from offshore perpetual futures are not explicitly listed as taxable under the current income tax law. It is the only outlet to report the strategy so far, so it remains a claim circulating among investors rather than a settled tax loophole.

What did South Korean regulators say about offshore perpetual futures?

The Financial Services Commission and the Financial Supervisory Service issued an investor alert on 16 October 2026, according to Bloomingbit, saying such perpetual futures are not institutionally permitted in South Korea and warning that leverage of 10 times to 200 times can wipe out an investment.

Our view

Taxing digital assets while leaving offshore perpetual futures outside the enumerated list invites exactly the behaviour now spreading through Korean investor communities. The Herald Business reports a 1x long strategy on Binance and Bybit circulating before the 22% levy even begins, and the numbers show the direction of travel: registered Korean exchanges lost 35% of their won deposits in the first half of 2026, according to Cryptopolitan. In my view, the practical problem is not the strategy itself but the identity gap behind it. Offshore venues that allow trading without full know-your-customer checks let users move value beyond the reach of domestic reporting, and the Financial Services Commission's own alert concedes these products sit outside Korean supervision and dispute resolution. The test will be whether the National Tax Service's detailed standards, due later this year, draw offshore derivatives into scope or leave the gap open.

Follow the latest Regulation updates as they happen on Regulation NewsFeeds.

— Keshav Aggarwal

What to watch: The National Tax Service is due to publish detailed tax standards later this year, according to The Block.