South Korea’s Ministry of SMEs and Startups has today officially proposed amending the Enforcement Decree of the Special Act on Promoting Venture Businesses. This pivotal revision would allow cryptocurrency trading platforms and virtual asset service providers (VASPs) to be reclassified as “venture companies,” unlocking access to a suite of previously restricted benefits.

🔍 What the Change Means

1. Venture Certification Eligibility

   • Crypto firms were explicitly excluded from venture status since 2018, grouped with high-risk industries like gambling and nightlife.

   • The amendment would remove crypto and blockchain firms from this exclusion, allowing both emerging VASPs and established ventures to qualify .

2. Tax Reductions & Financial Support

   • Certified ventures enjoy generous benefits: 50% corporate income tax reduction for five years, 75% cut in business real estate acquisition tax, and up to 70% off broadcast advertising rates.

   • Additional perks include government-backed matching funds, low-interest loans, subsidies, and export or IPO coaching.

3. Rectifying Past Penalties

   • A notable case was Dunamu, the parent of Upbit, which lost venture status and faced an $18 million tax bill in 2018—and failed its legal appeal.

🎯 Strategic Industry Rationale

• The Ministry highlighted that the existing legal protections—such as the Virtual Asset User Protection Act—now reduce systemic risks, making crypto firms suitable for inclusion.

• They emphasized that excluding crypto firms is now “inappropriate” and that this recognition will “activate and expand the venture ecosystem”.

🧭 Regulatory & Political Context

• President Lee Jae-myung, newly in office since June, has championed several pro-crypto policies:

  • Advocating for spot Bitcoin ETFs by late 2025,

  • Support for pension fund crypto investments,

  • Issuance of won-backed stablecoins.

• The Financial Services Commission (FSC) has submitted a roadmap for spot crypto ETF approval, and commercial banks are preparing for stablecoin projects.

📅 Next Steps & Timeline

• The proposal is open for public comment until August 18, 2025.

• A final enforcement date has not yet been confirmed; processing time may extend into late 2025 or early 2026.

💼 What This Means for the Crypto Ecosystem

Overall, this proposed regulatory shift represents more than a tax break—it signals a strategic shift toward embracing blockchain and digital assets as core elements of Korea’s national innovation agenda.