South Korea’s Ministry of SMEs and Startups has proposed a legal revision that would allow crypto-related companies to register as venture businesses, making them eligible for various government benefits including tax breaks.
According to a notice published on July 9, the ministry aims to amend the “Special Act on Promoting Venture Businesses.” If passed, the revision would remove restrictions that currently prevent digital asset firms and other crypto-affiliated businesses from qualifying as venture companies.
In South Korea, companies certified as venture businesses are typically startups or small and medium-sized enterprises (SMEs). They are eligible for government-backed incentives such as tax reductions and financial support, depending on factors like technological innovation and investment.
“The amendment will help invigorate and expand the venture business ecosystem, and support the growth of the virtual asset industry,” the ministry stated in the notice.
Previously, crypto companies were barred from registering under the venture business category, lumped together with restricted sectors such as gambling.
A notable example is Upbit’s parent company, Dunamu, which lost its venture certification in 2018. As a result, it was hit with an additional ₩20 billion ($18 million) in corporate taxes and lost access to related government benefits. The company challenged the ruling in court but lost the case.
The proposed legal change marks a significant policy shift and could signal increased institutional support for the crypto industry in South Korea.
South Korea’s Shift Toward a Pro-Crypto Policy
The proposed policy amendment aligns with a series of pro-crypto initiatives introduced by South Korea’s newly elected president, Lee Jae-myung. Since taking office last month, President Lee has pledged to support cryptocurrency assets pegged to the South Korean Won and has proposed allowing the country’s national pension fund to invest up to $884 billion in digital assets.
In line with this vision, his administration is also working to lift the current ban on crypto-backed exchange-traded funds (ETFs). The government aims to enable trading of spot Bitcoin ETFs by the second half of the year.
Meanwhile, the ruling Democratic Party, which brought Lee to power, is actively pushing for regulatory approval of the nation’s first stablecoin legislation, known as the “Basic Act on Digital Assets.”
