Market News

South Korea's Crypto Landscape Transformed by New Venture Company Classification

South Korea is poised for a significant transformation in its crypto sector as the government proposes a regulatory overhaul for digital asset firms.

The Ministry of SMEs and Startups aims to officially recognize crypto businesses as venture companies, enabling them to access tax breaks and government funding for the first time.

This proposal is a marked shift from the previous policies that grouped crypto firms with restricted industries, preventing them from benefiting from state support.

The previous exclusion resulted in financial repercussions for companies like Dunamu, which faced hefty tax bills when it lost its venture status.

If enacted, the new rules would allow both new and existing firms to register as venture companies without the fear of losing that designation by engaging in crypto.

President Lee Jae-Myung's government views this legislative change as crucial for promoting innovation and integration of the crypto industry within the broader tech ecosystem.

The proposal is currently open for public feedback until August 18, 2025, signaling a community-oriented approach to the legislative process.

This initiative aligns with other advancements, such as potential approval for spot Bitcoin exchange-traded funds and the exploration of a Korean won-based stablecoin.

As this regulatory environment shifts, it could attract institutional investors, reduce compliance burdens, and enhance the legitimacy of the South Korean crypto industry.

Ultimately, the reclassification of crypto firms may solidify South Korea's role as a significant player in the global blockchain and digital asset market.