South Korea is reportedly lifting restrictions that have prevented crypto businesses from qualifying as venture companies, giving them new access to tax breaks and financing support.
During a cabinet meeting on Tuesday, South Korea’s Ministry of SMEs and Startups said it had passed a partial revision to the Enforcement Decree of the Venture Business Act to remove the restrictions on virtual asset trading and brokerage businesses, according to South Korean news outlet the KoreaTechDesk.
The change, slated to take effect on Sept. 16, will allow crypto firms to apply for venture certification, which opens up options for tax breaks and financial support.
Ted Koo, an attorney at law firm LIN, told Cointelegraph in July that advantages to the change include access to tax reductions, research and development grants, credit guarantees, financing support, and will allow existing venture companies to expand into the crypto space without losing their classifications.
South Korea’s changing crypto landscape
South Korea’s block on crypto firms came into force in October 2018, due to concerns about the speculative nature of cryptocurrencies at the time.
The government first flagged plans to lift the ban in July, pending consultation with the public and other relevant industry experts.
The Ministry said the choice to revoke the restrictions was due to the evolving global status of the industry and the maturity of user protection systems, KoreaTechDesk reports.
Ministry hopes new measure will grow the crypto industry
Once the ban is formally lifted, the Ministry reportedly expects growth to accelerate in virtual asset trading, brokerage, and other technologies such as blockchain, smart contracts and cybersecurity.
The Minister of SMEs and Startups, Han Seong-sook, said the “regulatory improvement” aims to secure “future growth momentum in line with the global trend of the digital asset industry.”
“We will focus our policy capabilities on creating a transparent and responsible ecosystem to facilitate the smooth inflow of venture capital and the growth of new industries,” she added.
South Korean crypto industry on the rise
The crypto industry in South Korea has benefited from a friendlier environment after the election of President Lee Jae-myung in June, who has since pushed forward with various crypto-related laws, including a bill to legalize stablecoins.
Related: South Korea caps crypto lending rates at 20%, bans leveraged loans
The cryptocurrency market in South Korea is projected to reach a revenue of $1.1 billion in 2025, according to online data platform Statista, and grow to $1.3 billion by 2026.
Meanwhile, its crypto exchange users in South Korea have surpassed 16 million, after receiving a boost from US President Donald Trump’s election win last November. The figure represents more than 30% of the country’s population.
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