In a groundbreaking move for the cryptocurrency industry, South Korea's government is set to reclassify crypto firms as venture companies, unlocking access to significant tax breaks and government subsidies. This policy shift, proposed by the Ministry of SMEs and Startups, aims to integrate digital asset businesses into the national startup ecosystem, fostering innovation in the rapidly growing sector.
The initiative, announced on July 9, 2025, addresses long-standing restrictions that have prevented crypto firms from registering as venture companies. By amending the Special Law for Venture Enterprise Promotion, South Korea is paving the way for these businesses to benefit from state-backed support programs, a privilege previously denied to them since 2018.
This reclassification is expected to have a profound impact on major players in the South Korean crypto market, such as Upbit and Bithumb, which have faced substantial financial challenges due to loss of venture status in the past. For instance, Dunamu, the operator of Upbit, reportedly paid billions in taxes after losing its designation, a burden that could now be alleviated.
Industry experts believe this move signals South Korea's commitment to becoming a global blockchain hub, encouraging technological advancement and attracting investment in the crypto space. The policy is also seen as a response to the country's massive adoption of digital assets, with holdings reaching over $71 billion in 2024.
While the exact timeline for implementation remains under discussion, the proposal has already sparked optimism among crypto entrepreneurs and investors. The potential for increased funding and reduced financial pressures could drive a new wave of innovation and competition in the market.
As South Korea continues to refine its regulatory framework for cryptocurrencies, this development marks a significant step toward balancing oversight with growth. Stakeholders are now eagerly awaiting further details on how these benefits will roll out and transform the landscape for crypto ventures in the region.
Andrew Lee
