South Korea to reclassify crypto firms as startups eligible for tax cuts and other benefits

Key Points

1. On July 9, South Korea proposed amending the 'Special Act on Promoting Venture Businesses' to allow crypto firms to register as venture businesses, which were previously banned from this category.

2. The amendment aims to activate and expand the venture ecosystem by including crypto firms, which were previously listed as banned businesses.

3. Under President Lee Jae-myung's administration, South Korea is adopting a pro-crypto stance, including plans to allow the national pension fund to invest in cryptocurrency and lift the ban on crypto-backed ETFs.

4. The government hopes to permit trading of spot Bitcoin ETFs by the second half of the year and is working on a stablecoin bill called the 'Basic Act on Digital Assets.'

5. Previously, crypto firms like Upbit's parent company Dunamu faced regulatory hurdles, such as additional taxes and loss of subsidies, but the new policies aim to reduce such barriers.