- South Korea opens doors for crypto firms with new reform.
- Crypto businesses now eligible for tax benefits and government funding.
- Regulatory shift boosts South Korea’s growing cryptocurrency industry and market.
South Korea has just cleared the path for cryptocurrency businesses to thrive within the country’s venture ecosystem. A recent Cabinet decision has already approved the last change of the Enforcement Decree of the Special Act on the Promotion of Venture Businesses, which will become effective on September 16.
These reforms will lift a seven-year ban that grouped cryptocurrency companies and other limited sectors, such as gambling and nightlife.
At present, crypto businesses are eligible to venture business certification, which allows them to access crucial government-provided capital, accelerator services, and tax incentives. This action represents a significant step in terms of merging digital asset companies with high-tech startups and ensuring a higher level of regulatory supervision.
The reform is also consistent with the increased interest of South Koreans in so-called deep tech, which aims at blockchain and cryptography, as well as more innovative industries.
Since 2021, South Korea has obliged virtual asset service providers to register with the government. The new Virtual Asset User Protection Act is an additional protective measure that will enable crypto firms to gain access to venture ecosystems’ resources.
The new rules ensure that these businesses are kept in order and give the required protection to encourage more institutional capital.
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South Korea’s Shift Toward Embracing Cryptocurrency Firms
In a move signaling a thaw in its stance on digital assets, South Korea has approved changes that will allow cryptocurrency firms to qualify as venture companies. This change, which will take effect on September 16, will enable crypto businesses to access tax incentives and financial aid previously off-limits.
The ruling followed a Cabinet meeting during which the Ministry of SMEs and startups approved a revision of the Enforcement Decree of the Venture Business Act. This update eliminates obstacles that formerly curtailed the trading and brokerage activities of virtual assets.
South Korea’s decision to lift the ban stems from growing international recognition of the cryptocurrency sector and stronger user protections. The Ministry states that the reform is meant to bring South Korea in line with world trends in digital assets, guaranteeing the sector’s future prosperity.
According to Minister Han Seong-sook, this change would establish a transparent and accountable venture capital ecosystem, which would assist in developing new economic sectors, including applications of blockchain, smart contracts, and cybersecurity.
Crypto Firms Set to Benefit from Government Resources and Support
With this reform, crypto companies can now access critical government resources, including accelerator programs like TIPS and the K-Startup Grand Challenge, tax incentives, and subsidized funding.
Attorney Ted Koo explained that the change also ensures that the already venture-certified businesses will not lose their status if they grow into digital assets, which would generate greater stability.
This will make South Korea comparable to the international leaders in regulating cryptocurrencies. With nations such as the U.S. moving forward with spot Bitcoin ETFs and stablecoin regulations, South Korea is also striding forward with its own stablecoin bill that will roll out in October. This change cemented South Korea as a competitive destination for crypto businesses, providing not only sound regulation but also extensive government assistance.
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