According to reports, South Korea will lift the previous restrictions that prevented cryptocurrency companies from obtaining venture company status, allowing them to gain new tax reductions and financing support.
According to South Korean media KoreaTechDesk, the Ministry of SMEs and Startups announced at a cabinet meeting on Tuesday that it has passed partial amendments to the Enforcement Decree of the Venture Business Act, removing restrictions on virtual asset trading and brokerage businesses.
The policy change will take effect on September 16, at which point cryptocurrency companies can apply for venture company certification, thereby gaining opportunities for tax reductions and financial support.
Law firm LIN attorney Ted Koo stated in July to Cointelegraph that the advantages of this change include tax reductions, R&D subsidies, credit guarantees, financing support, and allowing existing venture companies to enter the cryptocurrency field without losing their qualifications.
South Korea's restrictions on cryptocurrency companies have been in place since October 2018 due to concerns about the speculative nature of cryptocurrencies.
The government first proposed lifting the ban in July, which still needs to be discussed with the public and relevant industry experts.
According to KoreaTechDesk, the Ministry of SMEs and Startups stated that the decision to lift the restrictions stems from changes in the global status of the industry and the increasingly mature user protection system.
After the ban is officially lifted, the Ministry of SMEs and Startups expects accelerated growth in virtual asset trading, brokerage, and related technology fields such as blockchain, smart contracts, and cybersecurity.
Minister of SMEs and Startups Han Seung-sook stated that this "regulatory improvement" aims to align with global trends in the digital asset industry and ensure "future growth momentum."
She added, "We will concentrate policy resources to create a transparent and responsible ecosystem that facilitates smooth inflow of venture capital and the growth of emerging industries."
Since President Lee Jae-myung's election in June, the South Korean cryptocurrency industry has benefited from a more friendly policy environment. Lee Jae-myung has promoted several cryptocurrency-related laws, including a bill to legalize stablecoins.
According to online data platform Statista, South Korea's cryptocurrency market is expected to reach $1.1 billion in revenue by 2025 and grow to $1.3 billion by 2026.
Meanwhile, the number of users on South Korean cryptocurrency exchanges has exceeded 16 million, driven by the election of U.S. President Trump last November. This figure has surpassed 30% of the national population.
Related: The U.S. Securities and Exchange Commission (SEC) delays decisions on BlackRock and Franklin Templeton cryptocurrency ETFs.
Original article: “South Korean Crypto Firms to Receive 'Venture Company' Certification Next Week”
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