South Korea Lifts Ban on Virtual Asset Firms: Implications for Blockchain Startups

On September 16, 2025, South Korea lifted a seven-year ban that prevented virtual asset firms from being designated as venture businesses. This policy change, enacted through a revision of the Enforcement Decree of the Special Act on the Promotion of Venture Businesses, marks a significant shift in the government's approach to the blockchain sector, which had been classified alongside gambling and entertainment industries since 2018. The Ministry of SMEs and Startups had previously restricted virtual asset exchanges, reflecting a lack of trust in the sector's legitimacy.

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The lifting of the ban is expected to provide substantial benefits for mid-sized and emerging blockchain firms. Companies such as Infinite Block, DSRV, and Happy Block are now positioned to regain or secure venture certification, which offers advantages like income and corporate tax reductions of up to 50% for five years, local tax reductions on real estate acquisitions, and easier access to financing through the Korea Technology Finance Corporation. These incentives are crucial for startups aiming to scale in a competitive environment.

South Korea Ends Venture Ban on Virtual Asset Firms — But Did It Miss the Window for Global Competitiveness? - KoreaTechDesk

Despite the positive outlook, industry voices have expressed concerns regarding the timing of the policy shift. An unnamed industry representative noted that while the change is welcomed, it raises doubts about the government's commitment to fostering a competitive venture ecosystem, especially since many firms had already matured during the years of restriction. Critics argue that the delay in recognizing the potential of virtual asset firms may have hindered South Korea's ability to compete with global crypto hubs like Singapore and Hong Kong, which have advanced regulatory frameworks.

South Korea Ends Venture Ban on Virtual Asset Firms — But Did It Miss the Window for Global Competitiveness? - KoreaTechDesk

The belated policy change highlights broader strategic questions about South Korea's position in the global digital asset landscape. While the new regulations provide clarity and support for local startups, the long-term competitiveness of Korea's blockchain sector will depend on how quickly these firms can leverage the benefits of the new policy. Industry experts are concerned that earlier recognition could have positioned South Korea as a stronger global hub for digital assets.

South Korea Ends Venture Ban on Virtual Asset Firms — But Did It Miss the Window for Global Competitiveness? - KoreaTechDesk

The South Korean government has framed the policy change as a necessary step to support innovation and growth in the blockchain sector. However, the mixed reactions from industry stakeholders suggest a cautious optimism, with many urging for a sustained commitment to an innovation-friendly regulatory environment.

South Korea Ends Venture Ban on Virtual Asset Firms — But Did It Miss the Window for Global Competitiveness? - KoreaTechDesk

As South Korea's blockchain startups begin to navigate the new regulatory landscape, the focus will be on how effectively they can capitalize on the opportunities presented by the lifted ban. The success of this policy shift will ultimately depend on the government's ability to maintain a consistent and supportive regulatory framework that encourages innovation and investment in the rapidly evolving digital asset space.

South Korea Ends Venture Ban on Virtual Asset Firms — But Did It Miss the Window for Global Competitiveness? - KoreaTechDesk