The Ministry of SMEs in South Korea announced a proposal to lift restrictions for crypto businesses, enabling them to be classified as venture companies.
Changes in Venture Company Classification
Currently, firms operating in the 'virtual asset' sector are excluded from the government’s venture classification, limiting their access to tax breaks and financial support. The ministry stated that the proposed amendment reflects a 'shift in perception' of the digital asset industry and the establishment of 'legal and institutional safeguards' aimed at protecting users.
Benefits of New Status
The proposed changes would allow crypto businesses to qualify as venture companies, while existing ventures can expand into the digital asset space without losing their classification. Being recognized as a venture allows access to government benefits, such as a 50% corporate income tax reduction for five years.
Crypto-Friendly Policies in South Korea
The proposed changes follow a growing trend of crypto-friendly policies in South Korea. Recently, the Bank of Korea suspended its central bank digital currency (CBDC) pilot to clarify its stablecoin policy. Newly elected President Lee Jae-myung has promised to foster conditions for stablecoin issuance pegged to the local currency.
The proposed changes could significantly impact the development of the crypto industry in South Korea, paving the way for new opportunities for venture companies and promoting the growth of the digital asset sector.
