Crypto-related companies in South Korea will soon be able to seek venture capital (VC) investment after the government lifted a seven-year ban.
According to the local outlet Seoul Kyungjae, the Ministry of SMEs and Startups confirmed that the restriction will officially end on September 16. The ministry said the State Council, the country’s top executive and ministerial body, has already approved the change.
South Korea Lifts Ban on VC Funding for Crypto Firms
South Korea’s State Council has approved a partial amendment to the Enforcement Decree of the Special Act on the Promotion of Venture Businesses, ending a seven-year ban on venture capital (VC) funding for crypto firms.
The amendment removes the classification of crypto trading and brokerage companies as “restricted venture businesses,” a label first imposed in October 2018 by the Moon Jae-in government to cool what it described as an “overheated, speculative” market.
The move, which previously drew heavy criticism from the crypto community, had put the industry on par with bars, nightclubs, and licensed gambling venues in terms of investment restrictions.
The Ministry of SMEs and Startups explained that the revision reflects the changing global role of the cryptoasset industry. It also highlighted that the law now provides broader protection mechanisms for domestic exchange users.
The ministry said the change aims to foster growth in the “digital asset ecosystem,” with a particular focus on companies working in blockchain and cryptography. By lifting the restriction, Seoul expects crypto firms with technological strength and growth potential to access new VC investment opportunities.
“We will foster a transparent and responsible ecosystem. We will help facilitate the flow of venture capital and the growth of new industries.”
The Ministry of SMEs
South Korea’s Financial Services Commission (FSC) chief nominee, Lee Eok-won, has drawn criticism from the crypto industry after stating that cryptocurrencies lack intrinsic value and do not meet the basic requirements of a currency, comments that come at a sensitive time as the country works through the challenges of shaping its digital asset regulations.
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