South Korea Poised to Grant Legal Status, Tax Incentives to Crypto Firms
Table of contents
Unlocking Venture Status and Financial Benefits
Currently, cryptocurrency businesses in South Korea are explicitly excluded from registering as venture companies, a designation that provides access to a range of vital incentives including tax cuts, government funding, subsidies, and loan guarantees. This exclusion has previously led to considerable financial burdens for major players, exemplified by Upbit's parent company, Dunamu, which faced a substantial ₩24 billion tax bill after losing its venture status in 2018.
The Ministry of SMEs and Startups is spearheading this reform, proposing to remove virtual asset firms from the restricted list. This reclassification acknowledges the innovative and entrepreneurial nature of crypto businesses, enabling them to apply for venture status. If approved, this policy change would unlock significant financial relief and growth opportunities, allowing crypto startups to thrive and incentivizing existing venture-certified companies to explore ventures within the digital asset space without risking their current benefits.
Aligning with Pro-Crypto National Agenda
This progressive proposal aligns seamlessly with President Lee Jae Myung's broader pro-crypto agenda, which seeks to position South Korea as a leader in the global digital economy. The government's wider crypto strategy includes exploring support for spot Bitcoin ETFs, planning the introduction of a Korean won-based stablecoin, and reviewing the current ban on institutional crypto trading. The public now has an opportunity to provide feedback on this transformative proposal until August 18, 2025, marking a critical period for shaping the future of South Korea's crypto landscape.
