South Korea's Small and Medium Business Enterprises Agency has proposed a significant amendment to the current law that could reshape the country's cryptoasset industry. This proposal aims to allow cryptoasset companies to register as startup companies. This will help them access government subsidies, tax benefits, and financial support.
This move indicates a broader transformation to promote innovation in the digital asset sector under the leadership of crypto-supportive President Lee Jae-Myung.
South Korea Proposes Law Changes to Support Crypto Companies
In the official announcement released today, the ministry proposed an amendment to a specific South Korean law, the Enforcement Decree of the Special Act on Promoting Startup Businesses. This law provides numerous benefits for venture investment companies.
These benefits include government-supported matching funds, tax incentives, loan guarantees, subsidies, and investment support for designated startup clusters.
However, under current regulations, virtual asset businesses such as crypto trading and brokerage are considered restricted. This means:
- New businesses cannot register as startup companies if they are involved in virtual assets.
- Current startup companies wanting to register as virtual asset operators will have their startup company certification revoked.
The ministry is now seeking to remove virtual asset-related sectors from the list of restricted industries. This change stems from increasing industry recognition and the establishment of legal and institutional frameworks, such as the Virtual Asset User Protection Act, aimed at protecting users.
The proposal aims to promote industry development, ensure policy consistency, and drive innovation in this sector.
"Innovative and startup virtual asset businesses based on new technologies will be recognized as startup companies. Current startup companies will be able to pursue virtual asset-related businesses, which is expected to activate and expand the startup ecosystem. This is believed to promote the development of the virtual asset industry," the announcement stated.
The ministry is currently seeking public opinion on the proposed changes. Organizations, institutions, and individuals can submit their comments online or in writing before 08/18/2025.
This development occurs against the backdrop of increasing crypto promotion in the country under a favorable legal environment. President Lee has made multiple crypto-supportive commitments. One of his campaign promises was to implement a two-phase framework for cryptoassets.
He also committed to loosening regulations to promote private sector-led practical applications. Furthermore, Lee pledged to introduce spot Bitcoin ETFs and issue a Peg stablecoin pegged to the South Korean won.
In line with this, BeInCrypto previously reported that eight South Korean banks are collaborating to launch a joint stablecoin. These efforts signal a promising future for cryptocurrencies in the country. This could position South Korea as a leader in global crypto innovation and promote sustainable development in this sector.
