Nonfungible tokens (NFTs) are not classified as virtual assets by the Financial Services Commission (FSC) of South Korea, and hence will not be regulated. \
Following an assessment of the Financial Action Task Force’s new standards, the FSC decided not to regulate NFTs (FATF). According to the FATF’s Oct. 28 advice report, NFTs or other crypto-collectibles will generally not be considered Virtual Assets, regardless of their qualities.
On November 5, a representative from a branch of the FSC made a statement to a group of reporters about the decision. According to the official, according to the FATF’s position on NFT regulation, South Korea would not issue regulations for NFTs.
The fact that FATF believes NFTs are unique rather than interchangeable — the fundamental meaning of being “nonfungible” — is clearly the emphasis of FSC. Not only that but the decision was also based on the fact that NFTs are used as collector items rather than as a means of payment.
Some specialists in Korea are critical of the choice not to regulate NFTs, according to stories in the South Korean newspaper Herald Corp. They expressed concern that NFT prices could be manipulated and hence used for money laundering because issuers would not be compelled to adhere to any anti-money laundering regulations.
Koreans will not be required to pay any taxes on NFTs, despite the fact that they will be required to pay taxes on cryptocurrency beginning in early 2022.
The parent firm of the Upbit crypto exchange, Dunamu, may be pleased with the recent news.
According to rumours, Dunamu and its high-flying new partner Hybe are planning to enter the NFT industry with collectibles based on the hugely popular BTS K-pop group.
