South Korea Ends Seven-Year Ban Allowing Crypto Firms Access to Venture Capital

Highlights:

• South Korea ends a seven-year ban, giving digital asset firms access to tax breaks, financing, and venture company status.
• South Korean crypto firms can now access venture capital after the government lifts restrictions on September 16.
• Crypto adoption in South Korea has risen, with over 16 million users and revenue projected to reach $1.3 billion by next year.

South Korea will lift its long-standing restrictions on crypto companies seeking venture capital funding. The change will take effect on September 16. The Ministry of SMEs and Startups confirmed the decision after the State Council, the country’s top executive body, signed off on the revision. The cabinet passed an amendment to the Enforcement Decree of the Venture Business Act. This change removes crypto trading and brokerage firms from the category of restricted venture businesses.

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South Korea to Lift the Ban on Crypto Company VC Investments on September 16

According to HashNews, citing Cryptonews, South Korea's Ministry of SMEs and Startups announced that it will officially lift the ban on September 16 on venture capital (VC) investments in companies…

— HashNews👩🏻‍🌾 (@HashNews01) September 11, 2025

The ban was introduced in October 2018 during the administration of President Moon Jae-in. Officials argued the restrictions were needed to cool a speculative market. At the time, crypto firms faced the same investment limits as bars, nightclubs, and gambling venues. Meanwhile, industry participants criticized the measure as unfair and damaging to innovation.

From mid-September, cryptoasset-related firms will now be able to apply for venture company certification. This status opens access to venture funding, tax benefits, and financial support. The change places them on the same footing as other technology-driven firms in South Korea’s growing startup ecosystem.

South Korea Ends Seven-Year Ban With New Venture Rules

The ministry explained that the decision reflects the industry’s global transformation and the growing strength of domestic user protection measures. Officials said the law now ensures broader safeguards for exchange users and market participants.

The reform provides new advantages for crypto businesses. These include access to research and development grants, tax breaks, credit guarantees, and broader financing opportunities. The current venture firms will also be in a position to diversify into the crypto industry without the risk of losing their accreditation.

The government emphasized the need to promote blockchain and cryptography-based companies within the digital asset economy. Moreover, the change in policy is likely to favor companies with a high technological basis and high growth potential. Minister of SMEs and Startups Han Seong-sook said the policy aims to build a transparent and responsible industry. She noted that the government will focus on enabling venture capital inflows while supporting new digital businesses.

Industry Leaders See Growth Ahead as Adoption Surges

The crypto industry welcomed the government’s decision. Kim Jae-jin, vice chairman of the Digital Asset Exchange Association (DAXA), described the move as a potential turning point for the sector. DAXA represents the five largest exchanges in South Korea.

The policy environment has also been affected by political changes. The new president, Lee Jae-myung, elected in June, has made a series of crypto-friendly moves, including a bill that would legalize stablecoins. His government has been perceived to be more conducive to digital assets than those before it.

Asian financial centers are accelerating the deployment of local stablecoins: South Korea's KRW stablecoin bill is expected to be submitted in October, major banks have launched pilot offerings, and the liquidity landscape is undergoing a structural shift, with a gradual decline… pic.twitter.com/OskaAtejiU

— Fiducia Trust Advisors (@fiducia_trust) September 5, 2025

The market indicators show consistent growth. For instance, Statista estimates the cryptocurrency market revenue in South Korea to be $1.1 billion in 2025 and $1.3 billion in 2026. This trend indicates growth in the opportunities for companies in the industry. Adoption levels continue to rise as well. South Korea has over 16 million registered crypto exchange users. Industry analysts are optimistic that the elimination of funding limits, coupled with the continued increase in adoption, will create a stronger hold in the global crypto market.

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