- Trending
- Comments
- Latest
South Korea has officially moved to end crypto ventures restrictions that have sidelined digital asset firms from the nation’s startup ecosystem since 2018. The Ministry of SMEs and Startups announced on Tuesday that it had passed a partial revision to the Enforcement Decree of the Special Act on Fostering Venture Businesses.
Starting September 16, cryptocurrency businesses will be able to apply for venture certification under the same terms as traditional startups, making them eligible for government-backed benefits including tax incentives, funding programs, and financial support.
“This regulatory reform is designed to align Korea with global trends in digital assets and to secure future growth engines,” — Han Seong-sook, Minister of SMEs and Startups, said in a statement.
The shift reflects South Korea’s changing stance on digital finance. For years, authorities justified crypto ventures restrictions as necessary to limit speculative risks, but policymakers now see digital assets as a potential driver of innovation and competitiveness.
Momentum accelerated after pro-crypto President Lee Jae-myung took office in June. His administration has prioritized financial reforms supporting blockchain and stablecoins, arguing that restrictive rules were hampering the growth of industries tied to smart contracts, cybersecurity, and blockchain infrastructure.
According to government data, South Korea’s crypto market is expected to grow into a $1.3 billion sector by 2026. Officials believe lifting crypto ventures restrictions will help position the country as a leading hub for digital asset innovation, while attracting foreign capital.
“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,” — Han Seong-sook added.
The removal of crypto ventures restrictions grants blockchain and crypto firms access to the same privileges enjoyed by traditional startups. These include reduced corporate taxes, subsidies for research and development, and preferential access to public financing schemes.
Industry observers say this could boost domestic employment, accelerate the development of digital finance tools, and encourage institutional investors to enter the space.
“Recognizing crypto firms as venture companies levels the playing field and will likely spur growth across the blockchain economy,” — Kim Hye-jin, a fintech researcher at Seoul’s Future Finance Institute, told Yonhap News.
Despite easing crypto ventures restrictions, regulators have emphasized that investor security remains central to policy design. Over the past months, South Korea’s Financial Services Commission (FSC) has introduced measures to curb speculative activity.
Earlier this month, the FSC banned leveraged crypto lending products and capped interest rates at 20% to reduce risks associated with excessive borrowing. In late August, it ordered exchanges to temporarily suspend crypto lending services until new compliance rules are fully implemented.
“These steps show the government is committed to fostering innovation without sacrificing consumer protection,” — Park Min-soo, professor of financial law at Korea University, explained.
The end of crypto ventures restrictions marks a significant milestone for South Korea’s digital economy. With venture status unlocked, crypto startups may find it easier to scale, attract investors, and contribute to the country’s broader technological agenda.
However, regulators face the challenge of balancing rapid growth with oversight. As South Korea repositions itself as a global crypto hub, the success of this policy will depend on how effectively it enforces safeguards while enabling innovation.
Industry analysts say the timing is also crucial. Global capital flows into digital assets are accelerating, and jurisdictions that create favorable conditions for startups are more likely to capture a share of this investment.
“Korea’s decision could tilt the balance in Asia, making Seoul a preferred base for crypto innovation compared to rivals like Singapore and Hong Kong,” — Park Min-kyu, Partner at Seoul-based VC firm Hashed, told Yonhap News.
Still, the market will be watching closely to see whether investor protection frameworks can keep pace with startup expansion. Failures or scandals involving newly certified ventures could risk undermining the credibility of the reform.
For crypto investors, the removal of crypto ventures restrictions may open new opportunities, but it also comes with heightened scrutiny of how responsibly these firms operate once inside the venture ecosystem.
