South Korea Amends Venture Laws to Support Crypto Companies

South Korea Recognizes Crypto Firms as Venture Companies

In a significant move for the cryptocurrency sector, South Korea’s Ministry of SMEs and Startups announced plans to amend the ‘Act on Special Measures for the Promotion of Venture Businesses’ on July 9th. This change would allow virtual asset trading and brokerage services to register as venture companies, enhancing their access to government support and incentives.

Impact on Crypto Market and Industry Growth

The proposed amendment aims to formally recognize virtual asset trading and brokerage services as venture companies, qualifying them for incentives traditionally reserved for startups. Dunamu, the parent company of Upbit, previously affected by losing its venture status in 2018, would benefit significantly from this reclassification. The reintroduction of such companies would revitalize the industry and encourage more investment, according to the Ministry’s notice.

The eligibility for venture benefits means that crypto firms could see improved liquidity and reduced operational costs, spurring further investments and potentially increasing trading volumes. Although no specific statements from significant industry figures have emerged, the regulatory framework’s prospective clarity is seen as beneficial to the sector’s growth.

While immediate market reactions remain muted, the amendment is perceived as a positive development for the crypto ecosystem. The regulatory approach is expected to bolster market legitimacy and attract tech entrepreneurs and investors. The South Korean Ministry of SMEs and Startups stated that recognizing VASPs as venture companies will significantly aid the sector’s growth.

Historical Context, Price Data, and Expert Analysis

Did you know? In 2018, Dunamu’s loss of venture status resulted in significant tax increases, highlighting the potential impact of regulatory reclassifications on Korean crypto companies.

Bitcoin (BTC) recently recorded a price of $108,558.70, with a market cap of $2.16 trillion and a market dominance of 64.16%, according to CoinMarketCap. The asset showed a 24-hour price increase of 0.45%, while trading volume decreased by 7.71% to $42.46 billion. Over 90 days, Bitcoin’s price surged by 32.23%.

The Coincu research team indicates that this regulatory evolution could prompt a significant financial shift within South Korea’s economic landscape, emphasizing potential industry growth. The recognition of crypto firms as venture companies aligns with broader trends towards regulatory relaxation, positioning South Korea as a potential hub for digital asset innovation.