NFTs will not be regulated in crypto-friendly Korea, the ministry confirms 🚨 This article is 3 years old...
News ▸ South Korea ▸ NFTs
NFTs will not be regulated in crypto-friendly Korea, the ministry confirms
South Korea will be following FATF's advice on NFT regulation-related matters.
2 min read
Updated: Nov. 5, 2021 at 3:33 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The Financial Service Commission (FSC) of South Korea has restated in a public statement today that non-fungible tokens (NFTs) are not virtual assets and hence will not be regulated.
The confirmation to keep NFTs unregulated came after a review of the Financial Action Task Force (FATF) in the US. The guidance report issued by FATF states that “NFTs or crypto-collectibles based on their characteristics are generally not considered virtual assets.”
A fresh statement issued by an official from FSC states that “due to the FATF position on NFT regulation, we will not issue regulations for NFTs.”
South Korean experts believe NFTs prices can be manipulated
While NFTs may have been soaring high in popularity, South Korean authorities are still skeptical about the innovation. According to a local news outlet Herald Corp, financial experts in South Korea presume that NFT prices can be manipulated and used for money laundering-related activities.
The majority of experts in Korea are of the view that since NFTs are not considered as virtual assets, issuers will not be required to conform to anti-money laundering obligations.
Along with that, South Korean citizens will also not be required to pay taxes on NFTs even though they will be obliged to pay taxes on cryptocurrencies starting 2022.
Meanwhile, the news regarding NFTs remaining unregulated might fetch a lot of profits for Dunamu, South Korea’s leading fintech company. Dunamu maintains a dominant position in the sector of cryptocurrency trading in the country and is set to partner up with Hybe Entertainment- a prominent entertainment agency backing the famous boy band group BTS.
Both the companies look forward to acquiring more profits amid an uncertain NFT regulatory framework in the country.
Hybe had earlier announced that it will soon be launching KPOP inspired BTS NFTs in association with Dunamu. As a part of the deal, Hybe entertainment will acquire a 2.5% stake in the company while Dunamu will be acquiring a 5.6% stake in Hybe Entertainment, which is worth $592.4 million.
