South Korea removed a seven-year venture restriction on crypto companies

South Korea eases a seven-year restriction that excluded crypto companies from venture status, opening the door to tax incentives and better financing options.

The Ministry of SMEs and Startups confirmed that it had approved changes to the Enforcement Decree of the Venture Business Act, clearing the way for virtual asset brokers and exchanges. The measure will come into force on Sept. 16, allowing crypto businesses to seek venture status.

Han Seong-sook believes the amendment will cultivate future growth potential

Authorities first slapped the restriction in place in October 2018, when they blamed excessive speculation and public panic. Under that standard, crypto businesses were lumped in with gambling dens and nightlife spots, a classification the industry complained was detrimental for Korea’s innovation and competitiveness.

A lot has changed since then. South Korea has taken major steps to bring order to its crypto market, starting with the introduction of a licensing system for virtual asset service providers in 2021. This was followed by the passage of the Virtual Asset User Protection Act in July 2025, which added deposit protection, mandatory record-keeping, and bans on unfair trading — all key measures that helped professionalize the industry and address past concerns.

Globally, momentum has shifted, too. In the U.S., the SEC approved Bitcoin spot ETFs in 2024, and the GENIUS Act of 2025 established clear rules for stablecoins. Major players like Coinbase, Gemini, Circle, and Bullish have gone public or filed for Nasdaq and the NYSE listings, a clear signal that digital assets are moving firmly into the financial mainstream.

Korean officials indicated in July for the first time that they wanted to lift the restriction and put the plan out for public and industry comment. Now, with the partial amendment,  the Ministry has cited the sector’s international growth and the maturity of domestic user protection measures as key reasons for the policy reversal.

Ted Koo, attorney at LIN, said the revision will pave the way for tax benefits, R&D funding, credit guarantees, and financing support. Most importantly, it will enable incumbent venture-certified companies to participate in the crypto market without losing their certification.

What’s more, regulators anticipate that there will be an increase in innovation in virtual asset trading, brokerages, and related technologies, including blockchain infrastructure, smart contract solutions, and cybersecurity, once the ban has been lifted.

Minister of SMEs and Startups, Han Seong-sook, also said the reform aims to foster future growth potential and match the global trajectory of the digital asset industry. He commented, “This regulatory reform is designed to align Korea with global trends in digital assets and to secure future growth engines. We will concentrate policy efforts on fostering a transparent and responsible ecosystem that allows venture capital to flow smoothly and supports the growth of new industries.”

South Korea’s crypto exchanges have over 16 million users

The crypto space has gained momentum under President Lee Jae-myung’s leadership, as his government has advanced new crypto policies and worked on legalizing stablecoins since his June election. According to Statista, the crypto market in South Korea is expected to hit $1.1 billion in revenue next year and grow to $1.3 billion in 2026.

South Korea’s crypto exchanges now count more than 16 million users, a surge partly attributed to the momentum sparked by Donald Trump’s U.S. election win in November, representing more than 30% of Koreans.

In relation to this, Cryptopolitan recently reported that South Korean regulators formed laws to address the growing competition and risks associated with the crypto lending sector.  The Financial Supervisory Service reportedly prepared the guidelines with the Digital Asset Exchange Association (DAXA).

The Financial Services Commission noted that they intend to establish order through self-regulation and quickly pursue legislation based on future operational results.

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