South Korea Removes Restrictions on Crypto Venture Capital Funding

Jimmy Aki
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On September 9, South Korea reportedly removed long-standing restrictions that had prevented crypto businesses from being recognized as venture companies.

According to a report by South Korea’s KoreaTechDesk, the Ministry of SMEs and Startups approved the measure as a partial revision to the Enforcement Decree of the Venture Business Act and is set to take effect on September 16.

New Measure Project to Grow Crypto Industry

The legislative change grants eligible crypto firms access to substantial government benefits, including tax reductions and expanded avenues for financial support.

Officials believe this move could stimulate growth outside of the crypto sector. They expect a spillover effect in underlying technologies like blockchain and smart contracts.

The original ban dates back to October 2018 under the administration of former President Moon Jae-in. At the time, regulators cited an overhead and speculative market, aiming to shield investors from reckless capital allocation.

The policy had grouped crypto businesses with high-risk leisure sectors like bars and gambling halls, a classification the industry long argued was unfair and stifled technological innovation.

South Korea’s Ministry now admits the amendment reflects a global shift as crypto matures and exchange users benefit from wider consumer protections.

At the same time, governments worldwide are moving to nurture blockchain, smart contracts, and cryptography-driven technology.

The latest reform means crypto companies with proven technical skill and growth potential can finally seek venture capital funding. South Korea is choosing to see crypto as part of its digital future rather than a speculative threat.

Supporters say this is a major win for the domestic industry. They believe it will help scale South Korea crypto ecosystem and attract more innovative startups.

The economic potential driving this decision is substantial.

Data from Statista projects South Korea’s crypto market will generate $1.1 billion in revenue in 2025, with growth potential reaching $1.3 billion by 2026.

By enabling venture capital funding for companies with proven technical merit, the government is positioning the domestic ecosystem to capture a greater share of this expanding market.

Will 2026 Be the Breakthrough Year for Government Crypto Integration?

The initiative is part of a broader, proactive regulatory approach by the South Korean authorities. Earlier this year, the Bank of Korea established a dedicated virtual asset team inside its Financial Payments Bureau.

The Asian country’s pivot reflects a global policy shift towards cryptocurrencies.

In Belarus, President Alexander Lukashenko recently instructed the central and commercial banks to expand their use of crypto.

https://twitter.com/BitcoinMagazine/status/1965697798453805373

In Mexico, Binance launched Medá, a new Electronic Payment Funds Institution.

The platform will allow peso deposits and withdrawals, building a bridge between traditional finance and digital assets.

South Africa Finance Minister Enoch Godongwana has also outlined plans for new rules on cross-border crypto transfers. These regulations aim to bring security and clarity to businesses and individuals moving digital funds across borders.

Moreover, regulators in the United States are also working together to provide clearer frameworks. Their goal is to encourage innovation without losing oversight.

Observers believe all of these steps, combined, point to a larger breakthrough in 2026.

Pro-crypto policies will be more widespread. International examples will influence holdout governments. Adoption rates will rise beyond what is expected in 2025.

The year 2026 may well be remembered as the year when governments, not just startups, began treating crypto as part of the mainstream economy.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.