South Korea Reopens Venture Capital Path For Crypto Firms

(MENAFN- Yolo Wire) South Korea has removed a seven-year restriction that prohibited %Cryptocurrency related companies from becoming eligible for venture capital status. The Ministry of SMEs and Startups stated that a revised enforcement decree had been passed by the Cabinet, which removed trading and brokerage in digital assets from the list of restricted industries. The reform takes effect on September 16 and the crypto startups can apply for venture certification, following the same rules as other high-growth firms.

The first ban was introduced in October 2018 when speculative trading and public fear prompted regulators to include crypto businesses in the same class as gambling and nightlife businesses. Industry stakeholders complained that the measure was harmful to competitiveness, driving capital and talent overseas at a time when other countries were updating rules around digital assets.

Since then, South Korea has slowly developed a clearer regulatory framework. A licensing system for virtual asset service providers was introduced in 2021. More recently, the Virtual Asset User Protection Act of July 2025 had a focus on deposit security and preventing market manipulation. A separate %Stablecoin bill also indicated recognition of the importance of the sector.

These actions paved the way for policymakers to re-evaluate restrictions for venture capital. Officials now frame digital assets as part of Korea's growth strategy, not as a financial risk.

Access to Venture Certification and Capital

The new policy gives crypto firms the chance to obtain venture certification, which opens up numerous incentives. These include tax breaks for corporations, access to government-backed venture funds, and admission into accelerator programs such as TIPS as well as the K-Startup Grand Challenge.

Minister Han Seong-sook said the change is to catch up to digital asset developments around the world. He stressed that future policies will help a transparent and responsible ecosystem and direct venture capital into new industries.

For entrepreneurs, the lifting of restrictions comes with access to risk capital and state-supported financing previously unavailable. The decision also bolsters Korea's status as a competitive hub for blockchain innovation in Asia.

The reform coincides with a spate of crypto investment initiatives across Asia. Venture Capital fund Sora Ventures recently announced a fund looking to accumulate $1 billion in Bitcoin, with $200 million already raised from investors. In South Korea, digital asset firm Bitplanet announced plans to create the country's first institutional-grade Bitcoin treasury with a capital of $40 million.

These developments indicate a growing institutional confidence in the inclusion of cryptocurrencies in long-term investment strategies. By lifting the ban on venturing, South Korea is well placed to ride the wave, providing a better environment for blockchain startups and investors.

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