South Korean Ministry Drops Cryptocurrency Exchanges From Venture Enterprise Classification

The government of South Korea announced it had excluded cryptocurrency exchanges from legislation governing venture businesses in a press release issued Monday, August 13.

The brief document from the country’s Ministry of Small and medium-sized enterprises (SMEs) and Startups (MSS) explained that contrary to previous decisions, it would now place exchanges alongside bars and nightclubs as businesses that it would “not encourage as a venture enterprise.”

A rough translation of part of the press release explains:

“The Small and Medium Venture Business Department [of the MSS] has no intention to regulate cryptocurrency trading and disclosures (ICOs), but as problems such as speculation emerge, cryptocurrency exchanges are not a target for the government to encourage as a venture enterprise.”

The MSS added, “[w]e will also foster blockchain technology and related companies at the government level.”

South Korea continues its intense reshaping of the regulatory landscape around cryptocurrency, having begun the year with a turbulent period which ignited public unrest.

Now, the country’s crypto exchanges face strict banking and taxation obligations, while authorities continue to monitor the industry in a manner similar to the oversight in Japan.

At the same time, blockchain technology has become a long-term focus for investment, the government this week revealing the area would form one of eight it had singled out for major budget spending in 2019 of 5 trillion won (about $4.4 billion).