South Korea to Classify Crypto Firms as Venture Companies, Unlocking Government Perks

South Korea is moving to reclassify crypto trading and brokerage firms as “venture companies,” a status that would grant them access to government subsidies, tax incentives, and financial support.

The Ministry of SMEs and Startups issued a notice on Monday proposing an amendment to its startup law to include Virtual Asset Service Providers (VASPs) under the venture company umbrella.

The current law, in place since 2018, explicitly excluded blockchain-based crypto firms from receiving venture certification—placing them in the same category as gambling venues and nightclubs.

Proposed Law Aims to Legitimize South Korea’s Digital Asset Sector

The proposed revision aims to reverse that, potentially legitimizing the country’s growing digital asset sector.

Companies with venture status in South Korea benefit from a range of perks, including tax reductions and easier access to state-backed financing.

These benefits were previously stripped from crypto firms, notably in the case of Dunamu, the operator of Upbit, which faced an $18 million corporate tax bill after its venture certification was revoked.

Dunamu’s attempt to contest the ruling in court failed.

In the new proposal, the ministry said that recognizing “innovative, business-viable” crypto service providers as venture firms would broaden the country’s venture ecosystem and help accelerate virtual asset industry growth.

The shift comes as President Lee Jae Myung, who took office last month, ramps up support for the digital finance sector.

Lee has been vocal about lifting restrictions on crypto ETFs and institutional trading.

He has also backed legislative efforts to introduce Korean won-based stablecoins, a move that has already triggered a wave of trademark filings by major financial institutions.

The proposed reclassification signals a broader change in how South Korea views its crypto industry, no longer as a speculative outlier but as a sector worth integrating into its formal innovation economy.

If adopted, the amendment could open the door to increased investment and regulatory clarity for domestic crypto firms.

Korea’s FSC Eyes Spot Crypto ETFs

As reported, South Korea’s Financial Services Commission (FSC) has presented a roadmap to the Presidential Committee on Policy Planning proposing the approval of spot crypto ETFs.

The move came after President Lee Jae-myung’s campaign promise to modernize digital asset rules and boost opportunities for younger investors.

✅ South Korea’s FSC has submitted a roadmap outlining a potential framework to approve spot cryptocurrency ETFs.#SouthKorea #ETFshttps://t.co/A0gQDo2y0V

— Cryptonews.com (@cryptonews) June 20, 2025

The plan outlines implementation measures for spot crypto ETFs and regulatory frameworks for won-based stablecoins in the second half of 2025.

Historically, the FSC blocked crypto ETFs over volatility and financial risk concerns, maintaining that cryptocurrencies were unsuitable as underlying assets.