South Korea is making a significant change in its approach to the crypto industry. The Ministry of SMEs and Startups has announced plans to amend existing regulations to allow virtual asset trading and brokerage firms to register as venture companies. This move marks a major reversal from the 2018 Special Act, which excluded crypto-related businesses from receiving government support.
Previously, crypto firms were categorized alongside high-risk businesses such as pubs and gambling venues. This classification barred them from essential benefits such as tax incentives and financial aid. The new policy will open the door for these companies to access the same subsidies offered to other venture businesses, signaling a more supportive stance toward blockchain innovation.
Why This Matters for Crypto Companies in South Korea
The policy update could be a game changer for leading firms like Dunamu, the parent company of Upbit, South Korea’s largest cryptocurrency exchange. Dunamu lost its venture status under the old rules, resulting in an additional $18 million in taxes. With the proposed amendment, such companies would once again be eligible for tax relief and support, potentially driving renewed investment and development in the sector.
Moreover, this regulatory shift will also allow existing venture businesses to expand into crypto without losing their status. This could lead to a wave of cross-sector innovation as traditional tech startups and financial firms enter the digital asset space.
Aligning with South Korea’s Pro-Crypto Policy Direction
The change is in line with President Lee Jae Myung’s broader pro-crypto agenda. His administration is pushing to legitimize and regulate the digital asset industry while encouraging growth. This includes efforts to legalize Korean won-based stablecoins and introduce crypto ETFs (exchange-traded funds).
In addition, lawmakers and financial regulators are working on easing restrictions on institutional crypto trading. These combined actions indicate a coordinated shift toward building a more crypto-friendly environment in South Korea, positioning the country as a leader in digital finance across Asia.
As the legal landscape evolves, crypto firms and investors alike are watching closely. If passed, this amendment could not only legitimize South Korea’s blockchain sector but also serve as a blueprint for other nations seeking to balance innovation with regulation.
