Korea will not include NFT in crypto regulatory framework

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2021-11-07 02:29:05

The Financial Services Commission (FSC) of Korea reaffirmed in a statement on November 5 that NFT is not a virtual asset and will not be regulated.

Korea will not include NFT in crypto regulatory framework

Confirmation of the decision whether to include the NFT in the framework was made after reviewing the updated guidelines of the Financial Action Task Force (FATF). As a guidance report published October 28 from the FATF states that NFTs are not virtual assets and are not covered by the organization’s regulatory framework for cryptocurrencies as long as NFTs are used as “assets”. collect rather than pay or invest”.

“Due to the FATF’s position on NFT regulation, we will not be issuing regulation for the NFT. To be used as a payment method, a very large amount must be issued, but there is almost no reason for NFTs to be like that given their inherent scarcity nature.”

However, the official left open the NFT regulation in some cases, as outlined in the FATF definition. South Koreans will also not be required to pay taxes on the NFT although they will need to pay taxes on cryptocurrencies starting January 2022.

– See more: South Korea will impose a 20% tax on cryptocurrencies in 2022

South Korea’s financial regulator focuses on the fact that FATF considers NFTs “unique, rather than interchangeable. Besides, not everyone approves of this decision. Experts in South Korea believe that NFT prices can be manipulated and used to launder money, and since they are not considered virtual assets, issuers will not be required to comply with anti-money laundering obligations. .

Despite regulatory ambiguity, the NFT industry has flourished in South Korea. Although the country implemented a strict registration framework for cryptocurrency exchanges in September. Even so, the situation pushed giant Binance to decide to stop providing trading services. in Korea.

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