Today in crypto, a petition to eliminate South Korea’s steep tax on digital asset gains reached the threshold required for formal government review, the US Federal Reserve requested feedback on its proposed “skinny” payment account framework for fintech and crypto firms, and a former Silvergate executive broke her silence on her 2024 settlement with the Securities and Exchange Commission.

Petition against South Korea’s crypto tax reaches review threshold

A formal petition to eliminate South Korea’s proposed 22% tax on digital asset investment gains has surpassed the 50,000-signature threshold required for review by the National Assembly’s Finance and Economic Planning Committee.

The tax regime is currently scheduled to take effect in January 2027. Critics argue the proposal unfairly targets the crypto industry while traditional asset classes continue to receive more favorable tax treatment.

Supporters of the petition also framed the issue as generational. Younger South Koreans, many of whom have been priced out of the housing market and other traditional paths to wealth creation, have increasingly turned to crypto investing as an alternative.

“If taxation is enforced in order to secure short-term tax revenues, it is likely to lead to greater losses in the long term, namely, a contraction of industry and an outflow of capital and talent abroad,” a translated version of the petition said.

The "Petition regarding the abolition of the taxation of virtual assets" has exceeded 52,000 signatures. Source: South Korea Assembly

Fed seeks input on limited payment accounts after Trump order

The US Federal Reserve proposed creating limited payment accounts that could give legally eligible fintech and crypto-linked banks narrower access to its payment rails without the backstops available to traditional banks.

The proposal was released on Wednesday through a Federal Reserve Board request for comment and notice of proposed rulemaking, referring to “skinny master accounts” for nonbank financial institutions.

The Fed also encouraged regional Reserve Banks to pause decisions on Tier 3 account-access requests while it finishes the rulemaking, a step staff said is expected to end by Dec. 31, 2026.

Source: Eleanor Terrett

“The temporary pause will allow the Federal Reserve to solicit and consider public input on payment accounts and to promote consistent implementation,” the announcement said.

The move highlights ongoing regulatory tension over crypto access to US payment systems following President Donald Trump’s executive order calling for broader fintech and digital asset integration, while the Fed maintains a more cautious approach.

Silvergate’s Fraher breaks silence on settlement with Gensler’s SEC

The former chief risk officer of Silvergate has revealed she made the decision to settle with the US securities regulator in 2024 to avoid a “multi-year battle” in court, where she was accused of misleading investors about anti-money laundering rules and how the bank monitored crypto customers.

In her first public comments about the settlement on Wednesday, Kate Fraher claimed that no financial agency proved that Silvergate’s anti-money laundering controls had failed, and that she only opted to settle to “move forward.” 

“The process itself is designed to apply maximum pressure, and the human costs are real. I was personally de-banked and had credit lines summarily closed—an aggressive tactic used to disrupt daily life and force compliance,” she said. 

The comments provide more insight into the circumstances surrounding the wind-down of Silvergate, a crypto-friendly bank that voluntarily closed following the collapse of FTX. Fraher said her ability to comment came after the SEC rescinded the long-standing “gag rule” on Monday.

Upon settling the charges, Fraher agreed to a civil penalty of $250,000 and was banned from serving as a company executive or board director for five years.

Fraher said the wind-down was not because of a “bank run” or market volatility from FTX’s collapse in November 2022, even as the bank experienced a deposit run of around 70%. 

Instead, Fraher said the company chose to wind down because the “broader administrative and regulatory pressure levied against the digital asset industry made operating a viable business impossible.”

Many crypto industry pundits labeled this as “Operation Chokepoint 2.0,” an unconfirmed plan in which US financial regulators cut off banking services to crypto companies in an attempt to restrict their ability to operate within the broader financial system.