South Korea has taken a major step toward embracing the digital asset industry. On Wednesday, the Ministry of SMEs and Startups announced a proposed amendment that will allow crypto-related businesses to qualify as venture companies. Until now, South Korea has excluded these businesses from the venture classification, limiting their access to crucial benefits such as tax breaks and financial support.
With this proposal, the government signals a change in how it views the digital asset space. The ministry explained that the new amendment reflects a broader “shift in perception” and the recent implementation of legal protections for crypto users.
Crypto Firms No Longer Left Out
Under the current system, South Korea denies “virtual asset” companies the status of venture businesses. As a result, these companies cannot access government-sponsored support programs that help startups and innovative companies grow. This exclusion has long frustrated crypto entrepreneurs, who feel the government has ignored their contributions to the economy.
Now, that exclusion may soon end. The proposed amendment will allow businesses involved in the crypto industry to gain recognition as venture companies. This includes startups offering crypto exchanges, blockchain infrastructure, wallet services, and even companies focused on NFT development.
The new proposal also benefits existing venture companies. These businesses can now expand into the digital asset space without losing their venture status. This flexibility will allow many tech-focused startups to explore blockchain-based projects without worrying about losing access to support programs.
Government Aligns with Innovation
The Ministry of SMEs and Startups said this change reflects the government’s evolving approach to the digital asset industry. The ministry noted that last year’s crypto regulations established strong legal and institutional safeguards to protect users and investors.
According to the ministry, continuing to restrict the sector now feels “inappropriate.” Instead, the government plans to support the digital asset industry, viewing it as a core part of South Korea’s innovation strategy. Officials said the amendment aims to “nurture” the sector and encourage responsible growth.
To ensure transparency, the ministry opened the proposal to public comments until August 18. After reviewing feedback from businesses, investors, and citizens, the ministry will finalize the new rules. A specific enforcement date has not yet been set.
What Venture Status Means for Crypto Firms
South Korea gives special treatment to companies classified as ventures. The goal is to support innovation, risk-taking, and entrepreneurship. When a company gains venture status, it becomes eligible for several major benefits.
First, the government offers a 50% reduction in corporate income taxes for the first five years of operation. This helps new businesses conserve cash and reinvest earnings into growth.
Second, venture companies receive a 75% reduction in business real estate acquisition taxes. For startups that need office or data center space, this benefit lowers the cost of expansion.
Third, the government provides broadcast and online advertisement discounts of up to 70%. These savings can make a big difference for young firms trying to market new products or services in a competitive digital space.
By allowing crypto companies to access these benefits, the government hopes to strengthen the broader startup ecosystem. Officials believe the move will create jobs, attract investment, and promote digital innovation.
South Korea Doubles Down on Crypto-Friendly Policies
This proposal fits into a broader pattern of crypto-friendly changes in South Korea. The country has gradually shifted from caution to support in its approach to blockchain technology and digital assets.
On Sunday, the Bank of Korea announced a temporary pause in its central bank digital currency (CBDC) trials. The bank informed participating commercial institutions that it will pause to reassess how a CBDC fits into the overall digital finance strategy. A senior banking official said the delay allows time to clarify the government’s stance on stablecoins.
President Lee Jae-myung has also helped push this shift. He campaigned on a platform that included several crypto promises. One major goal involves legalizing and supporting the issuance of stablecoins tied to the South Korean won. President Lee views digital finance as an opportunity to modernize the country’s financial system and stimulate economic growth.
Investors React with Confidence
South Korean investors welcomed the government’s crypto-friendly moves. On Tuesday, Cointelegraph reported that shares of major banks, including Kakao Bank, Kookmin Bank, and the Industrial Bank of Korea, surged between 10% and 19%. This spike followed news that the banks filed trademark applications related to stablecoins.
Investors saw the filings as a sign that the banks plan to actively enter the digital asset space. This excitement reflects growing confidence in the country’s long-term crypto direction. Many investors believe that South Korea is positioning itself to become a major player in global crypto markets.
Challenges Remain, But Momentum Grows
Despite the optimistic news, South Korea still faces challenges in fully integrating digital assets. Crypto markets remain volatile, and regulators must continue monitoring risks such as fraud, hacking, and financial instability. However, the country’s policymakers have shown they can balance innovation with regulation.
By lifting restrictions on venture status for crypto companies, the Ministry of SMEs and Startups shows a willingness to adapt. Instead of resisting change, the government now plans to shape it.
This policy shift may also influence other parts of Asia. Countries like Japan and Singapore already have strong digital asset ecosystems. With this move, South Korea sends a clear message that it too will compete for talent, capital, and influence in the blockchain industry.
What Comes Next?
If the amendment passes after the public comment period, crypto companies in South Korea can begin applying for venture classification. The government will likely create guidelines to determine which businesses qualify and what conditions they must meet. These rules will help ensure that only legitimate, compliant firms receive benefits.
South Korean startups that currently avoid crypto due to regulatory uncertainty may reconsider. Established tech companies may launch new divisions focused on Web3, NFTs, or DeFi. Investors may pour more capital into local crypto ventures, especially now that they can benefit from the same incentives as other tech startups.
The proposal marks a turning point. South Korea is no longer treating the crypto industry as an outsider. Instead, it is pulling the sector into its economic future. If implemented, this change could unleash a new wave of blockchain innovation—and position South Korea as a digital powerhouse in the years ahead.
Conclusion
South Korea’s Ministry of SMEs and Startups has proposed a major shift in how it treats crypto companies. By lifting restrictions that excluded them from venture status, the government aims to support growth, encourage innovation, and integrate digital assets into the national economy. With strong political backing, investor confidence, and public engagement, South Korea now stands at the edge of a new digital era.
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