South Korea Ends Seven-Year Ban on Crypto Venture Capital

South Korea ends 2018 ban allowing crypto startups to apply for venture certification from September 16.

Certified firms gain access to state-backed financing tax incentives and accelerator programs like TIPS and K-Startup.

The reform follows broader regulation including a stablecoin bill and the Virtual Asset User Protection Act.

South Korea has ended a seven-year prohibition on venture capital investment in cryptocurrency firms. The Ministry of SMEs and Startups confirmed Cabinet approval of a revised enforcement decree that removes digital asset trading and brokerage from the list of restricted industries. The change, effective September 16, gives crypto startups the ability to apply for venture certification and access government-backed programs.

Policy Shift After Years of Restriction

The ban was initially introduced in October 2018. Regulators at the time put crypto companies in the same bracket as gambling and night life businesses because of speculation and investor protection issues. The industry representatives had constantly claimed that the ruling curtailed their competitiveness in the field of fintech and blockchain as compared to other global markets.

It entails that crypto companies can now be recognized as such in the same venture certification framework as other high-growth firms. The certification process opens access to state-based venture financing, tax benefits, and accelerator programs, including TIPS and the K-Startup Grand Challenge. According to the officials, the reform was to put digital assets on an equal footing with other innovative industries.

Broader Regulatory Developments in Korea

The decision follows several regulatory milestones in the country’s digital asset sector. In 2021, South Korea launched a licensing system for virtual asset service providers. In July 2025, lawmakers enacted the Virtual Asset User Protection Act, which introduced deposit safeguards and measures against unfair trading practices. Earlier this year, officials also advanced a stablecoin bill to define standards for issuers and operators.

Minister Han Seong-sook stated that the latest reform was designed to align Korea with global digital asset developments. He said policy attention would focus on ensuring venture capital flows into responsible and transparent markets to build future industries.

Growing Market Activity

The lifting of the ban coincides with new domestic and regional investment moves. Korean firm Bitplanet announced plans to establish the nation’s first institutional-grade Bitcoin treasury. The company raised $40 million in initial capital to begin operations. In parallel, Sora Ventures, a regional investment firm, recently launched a fund targeting $1 billion in Bitcoin holdings, with $200 million already secured from partners.

By opening venture certification to crypto businesses, South Korea is positioning startups to gain formal access to state-backed support. This includes financing mechanisms, government accelerators, and opportunities previously unavailable under the 2018 restrictions.

The policy change signals a major shift in South Korea’s stance toward digital assets. Crypto startups will now have the tools to secure venture capital and integrate into formal innovation programs, marking a clear departure from the limitations imposed over the last seven years.