South Korea Moves to Reclassify Crypto Firms as Venture Companies, Unlocking Startup Benefits
South Korea is taking a major step toward legitimizing its domestic crypto industry by proposing legal changes that would allow cryptocurrency firms to register as official venture companies. The move could open the door to tax breaks, financial support, and greater access to government-backed benefits for virtual asset businesses.
On Tuesday, the Ministry of SMEs and Startups released a public notice outlining plans to revise its current startup law. The goal: to make crypto trading and brokerage firms eligible for “venture certification,” a status traditionally granted to innovative startups that meet criteria in areas like investment, research and development, or technological value.
A Policy Reversal Years in the Making
Until now, blockchain and crypto-related firms had been explicitly excluded from venture company status under the Special Act on Promoting Venture Businesses. Introduced in 2018, the exclusion placed crypto companies in the same regulatory category as bars, nightclubs, and gambling venues—effectively cutting them off from government incentives.
This policy had real consequences. Dunamu, parent company of South Korea’s leading crypto exchange Upbit, lost its venture designation in 2018 and was hit with an $18 million corporate tax bill after losing access to government subsidies. The company challenged the ruling in court but ultimately lost.
Under the proposed amendment, crypto firms would no longer face such restrictions. In addition to making them eligible for tax relief and state-backed financial aid, the new rules would also allow already-certified venture companies to expand into crypto-related services without losing their benefits.
Boosting the Crypto Ecosystem
In its notice, the ministry said the proposed change would "revitalize and broaden the venture ecosystem" and support the growth of South Korea's virtual asset sector by officially recognizing Virtual Asset Service Providers (VASPs) as legitimate startup ventures.
The initiative is in step with broader crypto-friendly moves under South Korea’s newly elected president, Lee Jae Myung. Since taking office last month, Lee has actively pushed policies aimed at fostering digital asset innovation. His administration is backing the development of Korean won-based stablecoins and is exploring the potential to lift bans on crypto exchange-traded funds and institutional crypto trading.
Major Korean banks and payment providers have already started moving in anticipation, filing trademarks for stablecoin ticker symbols and positioning themselves for a new wave of blockchain financial products.