South Korea Elevates Crypto as Engine of Future Growth

South Korea has taken a significant step in reshaping its startup landscape by removing a seven-year restriction that previously barred virtual asset trading and brokerage businesses from being recognized as venture companies. The policy change, confirmed by the Ministry of SMEs and Startups (MSS) on September 9, allows companies in these sectors to apply for venture certification under the same conditions as other innovative enterprises starting from September 16. This reform is seen as a pivotal development in aligning Korea’s regulatory environment with the global evolution of the digital asset market.

The restriction, introduced in October 2018, stemmed from concerns over speculative trading and consumer risks, during a period marked by volatile market conditions and public apprehension about cryptocurrency. At that time, crypto firms were grouped together with sectors such as nightlife and gambling, a categorization that drew criticism for its negative impact on Korea’s competitiveness in emerging technologies. The revised policy reflects a recognition of the maturation of the global digital asset ecosystem and the increasing role of blockchain and fintech in the innovation economy.

Domestically, South Korea has also evolved its regulatory framework to address risks in the sector. A licensing regime for virtual asset service providers was introduced in 2021, followed by the Virtual Asset User Protection Act in July 2025, which mandated deposit protections, record retention, and safeguards against unfair trading practices. These measures have contributed to a more structured environment for digital asset businesses, addressing the concerns that had previously justified the exclusion from venture status.

The removal of the restriction is expected to create new opportunities for blockchain and crypto startups by granting them access to venture certification. This status can unlock a range of benefits, including access to financing, risk capital, and state-backed support programs. The reform places these ventures on equal footing with other deep-tech sectors such as biotechnology, artificial intelligence, and semiconductors. Industry stakeholders view the move as a strategic shift that positions Korea as a more attractive destination for both domestic entrepreneurs and international investors seeking regulated access to the Asia-Pacific market.

MSS Minister Han Seong-sook emphasized that the reform is designed to align Korea with global digital asset trends and secure future growth engines. The government aims to foster a transparent and responsible ecosystem where venture capital can flow more freely, supporting the development and scaling of new technologies. This move also reflects a broader shift in government policy, moving from a risk-averse posture to one that embraces growth-oriented opportunities.

Analysts suggest that this policy shift will enhance Korea’s standing as a deep-tech investment hub and support its long-term ambitions in the global innovation economy. By integrating digital assets into the broader framework of strategic technologies, Korea is positioning itself to compete more effectively for global fintech and blockchain talent. The change also signals the country’s commitment to a balanced regulatory approach, treating virtual assets as fields of technological and economic competitiveness rather than purely speculative risks.