South Korea to let crypto companies qualify as venture firms: Report

South Korea is actively opening dialogue on the steps to take in order to make cryptocurrencies a regulated part of its financial ecosystem. The government there is now reportedly considering to allow crypto companies to qualify as venture firms in the country. This policy change will let crypto businesses tap into special tax benefits and financing support in the country.

This week, a partial amendment was finalized to South Korea’s Enforcement Decree of the Special Act on Fostering Venture Businesses. The move was approved by the Cabinet and informed to the the Ministry of SMES and Startups (MSS), national publication Korea Tech Desk reported on September 10.

The step removes crypto firms from the list of industries restricted from operating as venture capitals after a seven-year hiatus.

Back in 2018, South Korea had barred companies offering services around digital assets from gaining recognition as venture firms.At the time, the concerns around the volatility and risks linked to cryptocurrencies were at peak that nudged the South Korean government to take the step.

With the ongoing international crypto regulatory overhaul, however, the sentiment around this industry seems to be changing.

The new amendment will go into effect on September 16 — following which crypto firms will be allowed to apply for registrations as venture capital firms in the Asian nation.

This development is marks another milestone in Seoul’s crypto exploration. In the last few months, multiple other official steps have also indicated at the country’s pro-crypto stance that aims to position it as a hotspot for the industry alongside other regions like the UAE, the EU, as well as the U.S.

Last week, for instance, the country committed to participate in the global effort of sharing crypto transaction data to curb illegal crypto use. Adhering to the OEDC’s Crypto-Asset Reporting Framework (CARF), the country plans to have local exchanges collect transaction data of foreign users and flag suspicious transactions in order to curb cases offshore tax evasion.

The country’s Financial Services Commission (FSC) is presently working on a stablecoin-focussed bill that is likely to be presented before the National Assembly in October.

Over 16 million residents of South Korea hold crypto assets — making one third of its population of over 51.7 million. The figure was reportedly confirmed to Cha Gyu-geun, a representative of the Rebuilding Korea Party in March this year.