South Korea Lifts 2018 Ban on Venture Capital Investments in Crypto Firms

South Korea ends 2018 ban, allowing crypto startups to access VC funding and apply for venture certification starting Sept 16.

Crypto startups in South Korea are gaining new momentum as the government ends its 2018 ban on venture capital (VC) investments in the sector. With digital asset firms now eligible for venture certification, new opportunities are opening for funding and growth. 

The policy change reflects South Korea’s shift towards supporting blockchain innovation and aligning with global digital finance trends.

Crypto Firms No Longer on Restricted Investment List

South Korea’s Ministry of SMEs and Startups (MSS) has confirmed the end of a rule that previously blocked VC investment in crypto firms. 

The policy change, approved by the Cabinet, becomes effective on September 16 and removes digital asset trading and brokerage from the list of restricted business types.

This list, created in 2018, had grouped crypto firms with gambling and adult entertainment businesses. The updated rule allows cryptocurrency startups to receive the same VC backing and benefits as other high-growth industries. 

This update offers them access to state-supported programs for innovation and growth.

Venture Certification Now Available for Crypto Startups

With the policy reversal, crypto-related businesses can now apply for venture certification. This status provides access to several government-funded benefits, including financing programs, risk-sharing investments, and accelerator platforms. These include initiatives like TIPS and the K-Startup Grand Challenge.

Venture certification also allows companies to receive tax benefits and improved access to investor networks. This move supports digital finance innovation by allowing qualified crypto businesses to grow under formal government programs. 

The MSS noted that the certification process will follow the same conditions applied to startups in other sectors.

South Korea Aligns with Global Digital Asset Trends

The rule change follows several steps by South Korea to create a stable framework for digital asset businesses. In 2021, the government launched a licensing system for virtual asset service providers. In July 2025, the Virtual Asset User Protection Act was enacted, introducing new consumer safeguards and trading rules.

Minister Han Seong-sook stated the reform aims to align South Korea with global digital asset trends and secure future growth. 

The country has also proposed a stablecoin bill to regulate digital currencies tied to fiat currencies, as reported by the KoreaTechDesk, to ensure South Korea remains competitive in the evolving crypto market.

Local and Regional Crypto Investment Efforts Strengthen

The removal of the VC ban comes at a time of growing interest in crypto investments across Asia. In recent weeks, Sora Ventures launched a crypto venture capital fund, aiming to accumulate $1 billion in Bitcoin. The fund has already secured $200 million in commitments.

In South Korea, Bitplanet has announced plans to build the nation’s first institutional-grade Bitcoin treasury. The firm has already raised $40 million for the project. These developments show a rising interest among investors and companies in digital assets, and the new policy could further boost activity in the country’s crypto ecosystem.