In a significant policy shift, South Korea’s Ministry of SMEs and Startups announced plans to amend the “Act on Special Measures for the Promotion of Venture Businesses,” allowing cryptocurrency firms to register as “venture companies.” This reclassification would grant them access to government benefits previously unavailable to the sector, including tax incentives, financing support, and participation in innovation projects.
A Shift in Policy Perspective
Since 2018, South Korean authorities have excluded blockchain-based crypto firms from venture business certification, categorizing them alongside industries like bars and nightclubs. This classification effectively barred them from accessing various government support programs designed to foster innovation and growth in the startup ecosystem. The proposed amendment reflects a change in the government’s perception of the digital asset industry, acknowledging its potential and the establishment of legal safeguards aimed at protecting users.
Investor Identification, Introduction, and negotiation.
Implications for the Crypto Industry
The reclassification is expected to revitalize and expand the venture ecosystem, supporting the growth of the virtual asset industry. By recognizing innovative, business-viable Virtual Asset Service Providers (VASPs) as venture companies, the government aims to accelerate the sector’s development. Companies that achieve venture status would be eligible for a 50% corporate income tax cut for five years, a 75% reduction in business real estate acquisition tax, and up to 70% discounts on broadcast advertisements. These benefits mirror those available to traditional tech startups and could make South Korea more attractive to crypto businesses.
Historical Context and Industry Response
The exclusion of crypto firms from venture company certification has had tangible financial consequences. For instance, Dunamu, the parent company of leading exchange Upbit, lost its venture status in 2018, resulting in an additional $18 million in corporate taxes. The company contested the revocation in court but was unsuccessful. This policy change aims to prevent similar cases in the future by officially recognizing crypto companies as contributors to South Korea’s innovation economy.
Broader Regulatory Developments
This move aligns with South Korea’s broader efforts to strengthen its digital economy and support emerging technologies. The country has already established itself as a leader in digital infrastructure, with seamless digital tools and nationwide 5G access. This infrastructure supports the rapid development and scaling of new technologies, making it an attractive destination for startups and venture capitalists.
Conclusion
South Korea’s proposed reclassification of cryptocurrency firms as venture companies signifies a substantial policy shift aimed at fostering innovation and growth in the digital asset sector. By granting these firms access to government benefits, the country seeks to bolster its position in the global blockchain industry and create a more favorable environment for emerging technologies.
References
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South Korea Proposes Enabling Crypto Firm Benefit Access. Cointelegraph. July 9, 2025. (cointelegraph.com)
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South Korea seeks to grant startup benefits to crypto firms through reclassification. The Block. July 9, 2025. (theblock.co)
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South Korea Boosts Crypto Industry with Startup Reclassification. EconoTimes. July 9, 2025. (econotimes.com)
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South Korea Reclassifies Crypto Firms as Startups for Government Support. AInvest. July 9, 2025. (ainvest.com)
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South Korea Moves to Include Crypto Firms in National Startup Ecosystem. Crypto Daily. July 9, 2025. (cryptodaily.co.uk)
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