South Korea Unlocks Growth by Granting Crypto Firms Venture Status

South Korea is set to grant cryptocurrency businesses access to venture company benefits, marking a significant shift in its regulatory approach to the digital asset industry. On Tuesday, the Ministry of SMEs and Startups announced that a partial revision to the Enforcement Decree of the Venture Business Act had been approved during a cabinet meeting. The revision removes restrictions that previously barred virtual asset trading and brokerage firms from being classified as venture companies. This change is expected to take effect on September 16.

The regulatory reform opens the door for crypto firms to apply for venture certification, offering them access to tax reductions, research and development grants, credit guarantees, and additional financing support. Ted Koo, an attorney at law firm LIN, previously highlighted that the removal of these restrictions allows for greater financial flexibility and enables existing venture companies to expand into the crypto space without losing their classifications.

The ban on venture status for crypto companies was initially imposed in October 2018 amid concerns over the speculative nature of cryptocurrencies. The government first indicated its intent to lift the restriction in July, following extensive consultations with industry experts. Ministry officials cited the evolving global status of the crypto industry and the maturation of user protection systems as key factors in the decision to remove the ban.

The Ministry of SMEs and Startups emphasized that this regulatory improvement is part of a broader strategy to secure future growth in the digital asset sector. Minister Han Seong-sook stated the move is aligned with the global trend and aims to create a transparent and responsible ecosystem to facilitate the inflow of venture capital and the development of new industries.

South Korea’s crypto industry has seen increased momentum following the election of President Lee Jae-myung in June, who has advocated for a more crypto-friendly legal environment, including the legalization of stablecoins. The country's cryptocurrency market is projected to generate $1.1 billion in revenue in 2025 and reach $1.3 billion by 2026, according to Statista. Additionally, crypto exchange users in South Korea now exceed 16 million, representing more than 30% of the population.

Eric Trump, the second son of U.S. President Donald Trump, recently praised South Korea as the leading crypto market in Asia, citing its proactive approach to digital assets. He urged the country to maintain its aggressive stance, emphasizing the potential of Bitcoin to offer financial freedom to billions. His remarks were made during the Upbit D Conference, hosted by Dunamu, the operator of South Korea’s largest crypto exchange, Upbit.