The government will allow cryptocurrency trading and brokerage firms to establish in-house research institutes, making them eligible for policy support after previously classifying them as gambling-related businesses.
According to the government on Nov. 15, the Ministry of Science and ICT announced on Nov. 12 a proposed revision to the Enforcement Decree of the Act on Support for Research and Development by Corporate Research Institutes.
The amendment removes cryptocurrency trading and brokerage from the list of industries barred from recognition as corporate research institutes. The ministry said the move aims to support R&D activities in the sector and encourage companies to establish in-house research institutes.
The corporate research institute recognition system provides incentives to companies that meet requirements for dedicated research space and personnel. These include tax credits, additional points when applying for government-funded R&D projects and support for employing specialized research personnel.
Under current law, most service industries are eligible for recognition, with exceptions including entertainment and gambling-related businesses, in an effort to encourage corporate R&D.
However, cryptocurrency trading and brokerage had been classified as entertainment and gambling-related businesses under the enforcement decree.
When the government overhauled the system in 2020 to broadly allow R&D activities in the service sector, it retained the restriction on cryptocurrency trading and brokerage.
The Ministry of Science and ICT said the decision reflected policy concerns at the time over speculative risks in an overheated cryptocurrency market and the need to curb the spread of illegal activities.
However, the Lee Jae-myung administration shifted its policy approach toward fostering the cryptocurrency industry rather than regulating it shortly after taking office, adopting the creation of a digital asset ecosystem as a key national policy task.
As the cryptocurrency market combines finance and information technology, calls have also grown for allowing crypto trading and brokerage firms to establish corporate research institutes and encouraging R&D, particularly amid rising concerns over cybersecurity following a surge in hacking incidents.
In response, the Ministry of Science and ICT announced in the first half of this year that it would remove cryptocurrency trading and brokerage from the list of entertainment and gambling-related industries under the enforcement decree governing corporate research institutes.
However, the ministry said revisions were delayed due to internal consultations and legal reviews.
"We have been working toward revising the enforcement decree within this year," a ministry official said. "We plan to accelerate the process once consultations are completed."
in TECH
