South Korean government tax reliefs to include crypto firms in venture business benefits

South Korean government tax reliefs are set to include cryptocurrency businesses for the first time, as newly proposed amendments aim to classify qualified blockchain firms as venture companies, granting them access to tax breaks, subsidies, and state-backed funding.

The Ministry of SMEs and Startups announced the reforms today, marking a pivotal shift in policy that could unlock institutional support for crypto exchanges, developers, and Web3 startups.

If approved, the changes would reverse years of financial exclusion for the sector and position South Korea as a more competitive hub for blockchain innovation

For years, virtual asset firms in South Korea have operated on the sidelines of institutional support. But that’s about to change. The South Korean government tax reliefs initiative marks a watershed moment, aiming to recognize cryptocurrency-related companies as legitimate venture businesses.

Legal reform targets restrictions on Crypto balances

The proposed changes, officially published in a government notice, aim to revise the Enforcement Decree of the Special Act on Promoting Venture Businesses.

This decree currently excludes crypto-related entities from qualifying as venture businesses — a barrier that has prevented them from accessing the perks enjoyed by other tech startups.

Under the current law:

• New crypto firms cannot register as venture companies.

• Existing venture-certified companies lose their status if they venture into the crypto sector.

But if the amendment passes, South Korean government tax reliefs will extend to crypto trading platforms, blockchain developers, and digital asset service providers.

“This reform is long overdue,” says Dr. Hyun-Soo Kim, blockchain policy researcher at Seoul National University. “It reflects the government’s shift from caution to strategic engagement with Web3 technologies.”

Pro-Crypto administration leads the  charge

The reform is aligned with the vision of President Lee Jae-Myung, a staunch advocate of blockchain innovation.

During his campaign, Lee pledged to introduce crypto ETFs, support blockchain integration in the financial sector, and even launch a Korean won-pegged stablecoin.

Now, the South Korean government tax reliefs proposal could bring that vision one step closer to reality.

By eliminating crypto from the restricted industry list, the government signals a readiness to back real-world blockchain applications with financial and institutional muscle.

“Virtual asset businesses with innovative and entrepreneurial qualities will be newly recognized as venture businesses,” the Ministry stated. “This move is expected to activate the venture ecosystem and promote the growth of the virtual asset industry.”

Public feedback invited ahead of final decision

In a demonstration of transparency and civic engagement, the government is seeking public input on the proposed South Korean government tax reliefs through August 18, 2025.

Institutions, stakeholders, and individuals are encouraged to submit their opinions either online or in writing.

This participatory approach suggests the ministry’s commitment to getting the crypto transition right — balancing innovation with security and user protection, especially in light of recent legislation like the Virtual Asset User Protection Act.

Parallel to the regulatory changes, eight major South Korean banks are reportedly working together to launch a joint stablecoin.

Analysts suggest that easing tax and business restrictions could further accelerate banking sector collaboration with crypto firms, potentially turning South Korea into a fintech powerhouse.

“Tax relief is only the beginning,” says Jin-ho Lee, head of blockchain strategy at Korea Investment Partners. “These reforms could fuel a new wave of blockchain adoption across both public and private sectors.”

South Korean government tax reliefs could fuel global leadership

The South Korean government tax reliefs initiative does more than offer financial incentives — it positions South Korea as a serious contender in the global race for crypto innovation.

In an era where regulatory clarity often makes or breaks startup success, this could attract global players looking for a forward-thinking jurisdiction.