Tax Breaks Coming? South Korea Plans Venture Status for Crypto Firms
South Korea’s Ministry of SMEs and Startups has proposed a bill to change the country’s cryptocurrency landscape. The revision, announced...
Quick overview
- South Korea's Ministry of SMEs and Startups has proposed a bill to reclassify cryptocurrency companies as venture businesses, allowing them access to tax reductions and government benefits.
- Currently, crypto companies are categorized with high-risk sectors, preventing them from receiving subsidies and support available to early-stage tech firms.
- The proposed amendment aims to officially recognize blockchain and crypto firms, fostering growth in the country's virtual asset sector.
- Under the new pro-crypto policies of President Lee Jae-myung, South Korea is positioning itself as a global hub for digital finance.
South Korea’s Ministry of SMEs and Startups has proposed a bill to change the country’s cryptocurrency landscape. The revision, announced on July 9, will allow crypto companies to register as venture businesses and get tax reductions and other government benefits.
Currently, digital asset companies are not included in South Korea’s list of venture businesses and are grouped with high-risk sectors like gambling. This status bars them from subsidies and preferential treatment given to early-stage technology companies.
If passed, the amendment to the “Special Act on Promoting Venture Businesses” will officially reclassify blockchain and crypto-related companies and give them a clear path to government certification and support. According to the ministry, the reform will “activate and expand the venture ecosystem” and nurture the country’s growing virtual asset sector.
Tax Relief and Funding
Venture certification in South Korea means more than just symbolic support – it’s real financial benefits. Certified companies are eligible for:
- Corporate and income tax breaks
- Government-backed funding and grants
- Priority access to research and development incentives
- Support for overseas expansion and IPO planning
Crypto companies have been excluded from these benefits even as their market role grows. In 2018, Dunamu, parent company of leading exchange Upbit, lost its venture status and was hit with an $18 million tax bill. The company contested the revocation in court but lost.
The proposed law change will prevent similar cases in the future by officially recognizing crypto companies as contributors to South Korea’s innovation economy.
Government Shifts to Pro-Crypto Policies
The reclassification comes as the government under President Lee Jae-myung, who took office last month, is shifting to pro-crypto policies. Lee has vowed to make South Korea a global hub for digital finance and his administration is already pushing several crypto-friendly reforms.
Recent government initiatives include:
- Plans to allow spot Bitcoin ETFs by late 2025
- Proposals to allow the national pension fund to invest in crypto (up to $884 billion)
- Legislative progress on the “Basic Act on Digital Assets,” a draft bill on stablecoin regulation
These developments show South Korea is moving away from its previous cautious stance and is committed to a regulated but innovation-friendly crypto environment.
If the venture law revision is passed, it will be a big moment for crypto adoption in one of the most tech-savvy economies in Asia.
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