South Korea Ends VC Funding Ban for Crypto Firms

South Korea Ends VC Funding Ban for Crypto Firms

Key Points:

  • Main event, leadership changes, market impact, financial shifts, or expert insights.
  • Ban removal follows global market trends.
  • Potential increase in VC funding and market activity.

South Korea has lifted its ban on venture capital funding for crypto companies, effective September 16, 2025, marking a crucial shift in national policy after a seven-year prohibition enforced by the Ministry of SMEs and Venture Capital.

South Korea’s decision to lift the VC funding ban on cryptocurrency companies aligns with global trends and strengthens the nation’s growth engines.

The South Korean government has officially removed the ban on VC funding for cryptocurrency companies. The original restriction, imposed in 2018, was intended to curb speculative risks in the crypto sector. South Korea’s Ministry of SMEs and Venture Capital, formerly known as the Ministry of SMEs and Startups, led this regulatory change. Minister Han Sung-sook emphasized the government’s goal to secure future growth engines by facilitating VC flow. The removal of the ban enables crypto firms to attain official venture status, unlocking access to investments, tax benefits, and institutional support.

“This is part of securing future growth engines in line with global trends. We will concentrate policy resources so that venture capital flows smoothly into new industries and helps them grow.”

The industry anticipates a surge in local market activity and liquidity inflows with this policy adjustment.

The elimination of the funding restriction is likely to enhance Korea’s crypto adoption. A broader approval could boost global legitimacy as the nation progressively positions itself within digital finance. With access to venture capital, domestic crypto projects, including BTC, ETH, and top altcoins, are expected to witness increased funding and market participation. As international parallels strengthen, the policy change is expected to foster a more dynamic digital asset ecosystem in South Korea. Historical trends suggest potential benefits in local trading activity and exchange liquidity. South Korea’s regulatory shift could also stimulate domestic blockchain innovation, capital inflows, and economic growth in the financial sector.

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