Ban Reversal Marks a Turning Point
South Korea has officially lifted its seven-year ban on crypto companies seeking venture business status, a restriction that had long placed the sector alongside gambling dens and nightlife businesses. The Ministry of SMEs and Startups confirmed the policy change through amendments to the Enforcement Decree of the Venture Business Act, set to take effect on September 16.
The move means that virtual asset brokers and exchanges will now be eligible for venture designation, unlocking tax incentives, credit guarantees, and financing support.
From Crackdown to Professionalization
The restriction was first imposed in October 2018, when officials blamed excessive speculation and public panic in the crypto market. For years, the industry complained that the classification was a severe blow to Korea’s innovation and competitiveness.
Since then, however, the country has made major strides in building a structured regulatory environment. In 2021, South Korea introduced a licensing system for virtual asset service providers. This was followed by the Virtual Asset User Protection Act of July 2025, which mandated deposit protection, record-keeping, and bans on unfair trading.
Globally, momentum has also shifted. The U.S. SEC approved Bitcoin spot ETFs in 2024, and the GENIUS Act of 2025 provided clear rules for stablecoins. Leading firms such as Coinbase, Gemini, Circle, and Bullish have gone public or filed for major exchange listings, cementing digital assets as part of the financial mainstream.
What the Reform Unlocks
Legal experts and industry figures say the reform will have immediate ripple effects.
Authorities expect a surge of innovation in virtual asset trading, brokerages, and blockchain infrastructure, as well as related technologies such as smart contracts and cybersecurity solutions. The policy is also designed to allow venture capital to flow into the sector, encouraging startups to expand operations.
Crypto Market Momentum in Korea
South Korea’s crypto industry has been accelerating under President Lee Jae-myung’s administration, which has prioritized crypto-friendly reforms since his election in June. His government is working on a stablecoin legalization plan, while regulators are tightening oversight in areas like crypto lending to address risks and competition.
According to Statista, South Korea’s crypto market is projected to generate $1.1 billion in revenue in 2026, up from expected figures in 2025, with further growth on the horizon. Exchanges in the country already count more than 16 million users—representing over 30% of the population.
The government is balancing support with self-regulation, as the Financial Supervisory Service works alongside the Digital Asset Exchange Association (DAXA) to monitor industry practices while drafting new legislative measures.
Global Alignment and Future Growth
By lifting the ban, South Korea is aligning itself with global trends in digital finance while ensuring strong domestic protections. The reform represents not only an acknowledgment of crypto’s permanence but also a deliberate effort to secure new growth engines in Web3 innovation.
With access to venture status, crypto companies will now be able to compete on equal footing with traditional startups, ensuring that South Korea remains a key player in the international digital asset landscape.
