South Korea’s Ministry of SMEs and Startups has proposed changes to regulations that would allow crypto firms to register as “venture companies.”

If approved, this change would enable these firms to access government benefits such as tax reductions and financial support.

The proposed changes aim to improve the credibility of South Korea’s crypto firms and support the growth of the virtual asset industry.

Currently, crypto firms cannot register as venture businesses due to regulations established in 2018.

The ministry plans to amend the law to include Virtual Asset Service Providers (VASPs) under the venture company classification.

This change would provide them with access to benefits like subsidies.

It would also enable existing venture companies to engage in crypto-related projects.

🔗 Source: The Block

🧠 Food for thought

1️⃣ South Korea’s dramatic regulatory evolution reflects global crypto maturation

South Korea’s proposal to classify crypto exchanges as “venture companies” represents a remarkable reversal from its previous stance when authorities banned anonymous accounts and placed crypto alongside gambling in regulatory frameworks.

In 2017-2018, South Korea implemented some of the strictest crypto regulations globally, banning anonymous trading accounts after Bitcoin’s price surge raised concerns about “irrational” speculation 1.

The government’s approach led to the closure of over 70 virtual asset service providers during previous administrations, significantly contracting the market from numerous exchanges to just four major players 2.

This policy reversal follows a global pattern where countries initially react with strict restrictions before developing more nuanced regulatory frameworks that balance innovation with consumer protection.

The shift also reflects growing recognition of blockchain technology’s legitimacy, with major South Korean corporations like KT Corporation and SK Telecom developing secure blockchain networks for various applications 3.

2️⃣ Cultural and economic factors drove South Korea’s outsized crypto adoption