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Korea’s FSC confirms that NFTs are not regulated

November 5, 2021 - Around 2 mins mins to read

The Financial Services Commission (FSC) in South Korea today publicly affirmed that unusable tokens (NFTs) are not virtual assets and will not be regulated.

Confirmation of the decision not to review the NFT came after a review of the updated guidelines of the Financial Action Task Force (FATF). The FATF guideline report of October 28 states that “NFTs or crypto collectibles, depending on their characteristics, are generally not considered to be [Virtual Assets]. “

On November 5, an officer from a division of the FSC told reporters in a statement:

“Due to the position of the FATF on NFT regulation, we will not enact regulation for the NFT.”

The South Korean Financial Regulator is focusing on the fact that the FATF views NFTs as “unique and not interchangeable” – the definition of non-interchangeable, natural – and used instead as groupage to complete their decision.

Not everyone agrees. South Korea’s Herald Corp reports that experts in South Korea believe that NFT prices can be manipulated and used for money laundering, and since they are not considered virtual assets, issuers are not required to meet anti-money laundering obligations. South Koreans also don’t have to pay taxes on the NFT, although they will have to pay taxes on cryptocurrencies from January 2022.

Related: Korean Pension Fund Invests in Bitcoin ETF: Report

Dunamu, the parent company of the Upbit crypto exchange – which has a near monopoly on crypto trading in the country – will likely be pleased with the news.

Dunamu and his new celebrity partner Hybe will enter the NFT arena alongside collections based on the hugely popular K-pop group BTS. Hybe is the entertainment company behind the group and recently announced it would buy a 2.5% stake in Dunamu for $ 423.1 million. As part of the deal, Dunamu will purchase a 5.6% stake in Hybe for $ 592.4 million.

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Market

Korea’s FSC confirms that NFTs are not regulated

The Financial Services Commission (FSC) in South Korea today publicly affirmed that unusable tokens (NFTs) are not virtual assets and will not be regulated.

Confirmation of the decision not to review the NFT came after a review of the updated guidelines of the Financial Action Task Force (FATF). The FATF guideline report of October 28 states that “NFTs or crypto collectibles, depending on their characteristics, are generally not considered to be [Virtual Assets]. “

On November 5, an officer from a division of the FSC told reporters in a statement:

“Due to the position of the FATF on NFT regulation, we will not enact regulation for the NFT.”

The South Korean Financial Regulator is focusing on the fact that the FATF views NFTs as “unique and not interchangeable” – the definition of non-interchangeable, natural – and used instead as groupage to complete their decision.

Not everyone agrees. South Korea’s Herald Corp reports that experts in South Korea believe that NFT prices can be manipulated and used for money laundering, and since they are not considered virtual assets, issuers are not required to meet anti-money laundering obligations. South Koreans also don’t have to pay taxes on the NFT, although they will have to pay taxes on cryptocurrencies from January 2022.

Related: Korean Pension Fund Invests in Bitcoin ETF: Report

Dunamu, the parent company of the Upbit crypto exchange – which has a near monopoly on crypto trading in the country – will likely be pleased with the news.

Dunamu and his new celebrity partner Hybe will enter the NFT arena alongside collections based on the hugely popular K-pop group BTS. Hybe is the entertainment company behind the group and recently announced it would buy a 2.5% stake in Dunamu for $ 423.1 million. As part of the deal, Dunamu will purchase a 5.6% stake in Hybe for $ 592.4 million.

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