South Korea Reclasifies Crypto as Tech, Ends 7-Year Venture Ban

South Korea has officially removed a seven-year ban that previously excluded virtual asset trading and brokerage businesses from venture certification, a move that aligns the country’s startup policies with evolving global market trends. The decision, announced by the Ministry of SMEs and Startups (MSS), allows companies in the cryptocurrency sector to apply for venture certification under the same conditions as traditional tech firms. This policy shift is expected to foster greater innovation and investment in blockchain and deep-tech industries, positioning South Korea as a more competitive player in the global fintech landscape.

The restriction was first imposed in October 2018 amid widespread public concern over speculative trading and perceived risks associated with the cryptocurrency market. At the time, virtual asset businesses were grouped with industries such as nightlife and gambling, a classification that drew criticism for undermining the country’s digital innovation potential. However, the domestic and global regulatory environments have since evolved significantly. The U.S. Securities and Exchange Commission (SEC) approved Bitcoin spot ETFs in 2024, and major digital asset firms have increasingly gained listings on major stock exchanges like Nasdaq and the NYSE. In South Korea, the licensing regime for virtual asset service providers was introduced in 2021, and the Virtual Asset User Protection Act took effect in July 2025, marking the maturation of the country’s regulatory framework.

The removal of the venture certification restriction is part of a broader effort to integrate digital assets into the national innovation strategy. By placing blockchain and virtual asset startups on equal footing with other strategic deep-tech sectors, the government aims to stimulate investment and talent development in key industries. Minister of SMEs and Startups Han Seong-sook emphasized that the reform is aligned with global digital asset trends and designed to support the country’s long-term growth objectives. The move is also expected to enhance transparency and responsibility in the sector, ensuring that emerging technologies are developed within a well-regulated environment.

This change opens new pathways for both domestic and international investors to support blockchain-driven startups in South Korea. Previously restricted from accessing venture incentives and support programs, these firms can now benefit from state-backed initiatives such as the Technology Innovation Program for Startups (TIPS) and the K-Startup Grand Challenge. These programs provide critical resources for early-stage companies, including funding, mentorship, and access to global markets. With the regulatory burden reduced, the government is signaling a shift from risk-averse policies to those that prioritize growth and technological advancement.

The decision also marks a turning point for South Korea’s startup ecosystem, reinforcing the country’s ambition to remain a leading hub for deep-tech investment in the Asia-Pacific region. By recognizing virtual assets as a field of technological competitiveness, the government is not only addressing past misclassifications but also laying the groundwork for future innovation. The inclusion of blockchain and related technologies in national growth strategies could accelerate the development of homegrown solutions and expand their international reach, contributing to the country’s broader digital transformation goals.