South Korea lifts restrictions on crypto startups

South Korea will officially lift the restrictions that previously prevented cryptocurrency businesses from being recognized as venture startups, thereby opening up opportunities to access tax benefits and financial support.

The Korean Ministry of SMEs and Startups announced in a cabinet meeting on Tuesday that they have approved an amendment to the Enforcement Decree of the Venture Startup Act, removing restrictions on businesses trading and brokering virtual assets. The new regulation will take effect from September 16.

Thanks to this change, crypto companies can apply for venture startup certification, thereby benefiting from a series of incentives such as tax reductions, research and development support, credit guarantees, as well as financial grants. This is also a stepping stone for existing startups to expand into the crypto field without losing their certification.

According to the Ministry of Small and Medium Enterprises and Startups, this decision stems from the maturity of the investor protection system along with the increasingly important position of the global digital asset industry. The Ministry expects the new regulations to promote growth in the areas of virtual asset trading, brokerage, blockchain, smart contracts, and cybersecurity.

Minister Han Seong-sook affirmed: "We will focus our policy capacity on building a transparent and responsible ecosystem, in order to create favorable conditions for venture capital to flow smoothly and promote the development of new industries."

The crypto industry in South Korea is experiencing growth after President Lee Jae-myung took office in June and promoted several related laws, including the legalization of stablecoins. According to Statista, the crypto market here is expected to reach a revenue of 1.1 billion USD in 2025 and 1.3 billion USD in 2026, with the number of users on exchanges exceeding 16 million, equivalent to over 30% of the population.