- The lifting of South Korea’s ban on VC funding for crypto marks a significant change, impacting market dynamics.
- Crypto companies gain access to vital government support and private investment.
- Regulatory normalization aligns with global trends, impacting crypto growth engines.
This policy shift marks a key moment for crypto firms, potentially bolstering investment, fostering innovation, and enhancing competitiveness in the rapidly evolving digital asset landscape.
The South Korean government has officially revoked its seven-year prohibition on venture capital funding for cryptocurrency firms, effective September 16, 2025. Crypto trading and brokerage firms are now removed from the restricted list, granting them access to VC funding and government support.
The decision, led by the Ministry of SMEs and Startups, marks an important policy shift intended to align with global market trends. Minister Han Sung-sook emphasized the need to cultivate future growth sectors. The Digital Asset eXchange Association heralded this change as a crucial industry milestone.
“This is part of securing future growth engines in line with global trends. We will concentrate policy resources so that venture capital flows smoothly into new industries and helps them grow.” — Han Sung-sook, Minister, Ministry of SMEs and Startups, South Korea
South Korea’s revised stance enables crypto companies to gain venture status, unlocking opportunities for grants and subsidies previously withheld. Dunamu’s $18 million tax loss serves as a historical example of the economic impacts when venture status was stripped.
By opening doors to public and private investment, the government encourages growth in “deep tech” areas like blockchain. The decree promises to benefit Layer 1/2 protocols, exchanges, and other projects within Ethereum, Bitcoin, and wider DeFi ecosystems.
Past periods of asset bubble formation following similar global regulatory changes highlight the potential for industry expansion. The 2018 ban was imposed amid concerns about excessive speculation, similar to gambling restrictions. Recent global precedents, such as the U.S. Bitcoin ETF approval, serve as international context for this policy reversal.
Statements from key figures underscore the importance of adapting regulatory environments to support industry advancement. Future implications of this policy change include increased funding and development in local crypto ventures, fostering technological innovation and growth.
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