Bitcoin, Ethereum ETFs See Outflows as South Korea Advances Crypto Tax Framework

Crypto markets digested a fresh round of regulatory and security headlines on Tuesday ET, as U.S. spot Bitcoin (BTC) and Ethereum (ETH) ETFs posted net outflows while South Korea’s tax authority moved to operationalize a long-delayed crypto tax regime set to take effect in 2027.

In the U.S., spot Bitcoin ETFs recorded a combined net outflow of $89.6754 million on April 28 ET, according to SoSoValue data cited by PANews. BlackRock’s iShares Bitcoin Trust (IBIT) led the day’s redemptions with $112.0 million in net outflows, partially offset by inflows into ARK 21Shares Bitcoin ETF (ARKB), which posted $41.2021 million in net inflows— the largest single-day gain among issuers.

Total net assets across spot Bitcoin ETFs stood at $103.9 billion, representing roughly 6.56% of Bitcoin’s market capitalization. Cumulative net inflows since launch were reported at $58.211 billion. The mixed issuer-by-issuer flows underscore how ETF demand has become increasingly selective, with allocations rotating rather than moving in a uniform “risk-on” or “risk-off” pattern.

Spot Ethereum ETFs also saw selling pressure. The category recorded $21.8019 million in net outflows on April 28 ET, led by BlackRock’s iShares Ethereum Trust (ETHA) at $13.1697 million in net outflows. Grayscale’s Ethereum Trust ETF (ETHE) shed another $6.9149 million, bringing its cumulative net outflows to $5.254 billion.

Despite the day’s withdrawals, total net assets across U.S. spot Ethereum ETFs were pegged at $13.571 billion—about 4.9% of Ethereum’s market cap—while cumulative net inflows were reported at $12.026 billion. The divergence between strong long-term accumulation and intermittent daily outflows reflects a market still negotiating ETH’s valuation narrative: part beta exposure to broader crypto risk appetite, part structural bet on on-chain activity and staking-linked demand.

In Asia, South Korea’s National Tax Service (NTS) signaled it is moving from policy debate to operational execution ahead of the country’s planned crypto taxation. The NTS has begun preparatory work for a tax on income from virtual asset transfers and lending scheduled to start on Jan. 1, 2027, local outlet Edaily reported on Tuesday KST (Tuesday UTC).

Park Jeong-yeol, head of the NTS’ Individual Taxation Bureau, said the agency aims to ensure taxpayers can file smoothly during the comprehensive income tax reporting season in May 2028. Under South Korea’s current Income Tax Act, gains from virtual asset transfers and lending are set to be classified as ‘other income’ starting in 2027, with a 22% effective rate—20% national tax plus 2% local income tax—applied to annual income exceeding 2.5 million won (approximately $1,800 at current exchange rates).

To build an enforceable framework, the NTS plans to formally collect transaction and account data from major domestic exchanges including Upbit, Bithumb, Coinone, Korbit, and GOPAX. Authorities are also working to refine calculation standards and integrate reporting into the national tax portal, Hometax. A dedicated virtual asset analysis system is expected to become operational by the end of this year, according to the report.

The move comes as the crypto tax proposal remains politically sensitive in Seoul. Critics have questioned whether reporting standards are sufficiently mature and warned that overly rigid enforcement could accelerate ‘capital outflows’ toward offshore venues—an issue South Korea has grappled with repeatedly amid its high retail participation and active exchange ecosystem.

Elsewhere, governments and enforcement agencies continued tightening scrutiny of crypto payment rails. Canada’s federal government is considering a ban on cryptocurrency ATMs, describing the machines as a tool frequently used by fraudsters and criminal networks to extract funds from victims and move illicit proceeds, according to Odaily. The government said Canada hosts roughly 4,000 crypto ATMs—one of the highest per-capita levels globally—raising concerns about fast, low-friction transfers with limited in-person checks. Officials indicated that purchases through registered money services businesses could remain, while controls aimed at blocking illegal activity would be strengthened.

In the U.S., the Department of Justice announced an eight-year prison sentence for French national Maximilien de Hoop Cartier, accused of laundering more than $470 million through shell companies and cryptocurrency accounts. Prosecutors said Cartier operated an unlicensed over-the-counter crypto business beginning in 2018, misrepresented his activities to banks, and helped move funds through the U.S. to overseas criminal organizations, including recipients in Colombia. The court also ordered forfeiture tied to shell company accounts and roughly $2.36 million in fees, highlighting the government’s continued focus on ‘illicit finance’ facilitated by crypto infrastructure.

Security incidents added to the day’s risk backdrop. Blockchain security firm CertiK said Syndicate suffered an exploit involving the Commons cross-chain bridge, with an attacker obtaining about 18.5 million SYND tokens and selling them for roughly $330,000 before transferring proceeds to Ethereum. Separately, SlowMist reported an attack it attributed to an EIP-7702 account-delegation-related weakness that resulted in losses of about 54.93 ETH from a QNT reserve pool, emphasizing how permissioning and call-validation failures in delegated execution models can open pathways to fund drains.

PyShield also flagged a separate incident in which a user reportedly lost about $1 million tied to an Alchemix Yearn yvVault (yvWETH) position after interacting with a previously approved, unverified smart contract—an example of how lingering token approvals can become a latent attack surface even without a fresh protocol exploit.

On the institutional adoption front, JPMorgan Chase ($JPM) appointed Oliver Harris, formerly of Goldman Sachs ($GS), to lead its blockchain unit Kinexys, Bloomberg reported. Harris is expected to focus on commercializing applications and expanding partnerships with institutional clients. Kinexys’ blockchain payments network, launched in 2019, processed about $5 billion in daily transactions as of December, according to the report, reflecting how large banks are continuing to invest in tokenized settlement and enterprise blockchain rails even as public-market crypto sentiment fluctuates.

Finally, Aptos (APT) announced the launch of ‘Confidential APT,’ a privacy-focused token pegged 1:1 to APT that uses zero-knowledge proofs to conceal balances and transaction amounts while still enabling verification. The feature, which followed a governance proposal that passed by an overwhelming margin, is positioned as a tool for enterprises seeking to reduce exposure of treasury movements and trading strategies. Aptos said an ‘audit key’ mechanism can support compliance needs such as KYC and AML under defined conditions, differentiating the design from fully opaque privacy coins by keeping addresses and verification processes publicly auditable while restricting who can view sensitive transaction values.

Together, the day’s developments reflected a market balancing three forces at once: shifting ‘liquidity’ across major ETFs, accelerating regulatory implementation in key jurisdictions like South Korea, and persistent operational risk from exploits and compliance scrutiny—factors likely to remain central in crypto’s next phase of institutionalization.