South Korean Regulator Carves Out NFT Exceptions in Crypto Guidelines
South Korea’s Financial Services Commission (FSC) has introduced new guidelines to differentiate non-fungible tokens (NFTs) from virtual assets.
Aiming to mitigate widespread user risks. These guidelines, part of the Virtual Asset User Protection Act effective from July 19, 2024, were issued to clarify when NFTs are considered virtual assets. The FSC’s distinction hinges on NFTs’ limited issuance, primarily for content collection like videos and images, with minimal secondary market transactions. Consequently, NFTs are excluded from virtual asset classification if they are mainly for collection. Facilitate transactions, or serve unique purposes like authenticity tokens in art, property records, or supply chain verifications.
However, if an NFT functions as a virtual asset, it falls under relevant regulations. The FSC’s Enforcement Decree. Implementing the Virtual Asset User Protection Act. Delineates details like exclusions, user deposit management, secure storage mandate. And penalties for unfair practices, stressing the importance of evaluating NFTs based on their substance rather than just their name or technology.
Clever Robot News Desk 11st June 2024
