The Financial Services Commission in South Korea confirmed in a public statement that nonfungible tokens are not virtual assets, and will not be regulated.
The confirmation to keep NFTs unregulated came after a analysis of the Financial Action Task Force’s updated guidelines. An official from a branch of the FSC stated:
“Due to the FATF position on NFT regulation, we will not issue regulations for NFTs.”
Korea’s financial regulator focused on the fact that NFTs are “unique, rather than interchangeable,” which is of course the definition of nonfungible and are used as collector items instead of as a means of payment to finalize their decision.
Some experts in Korea believe that NFT prices can be manipulated and used for money laundering and since they are not considered to be virtual assets, issuers will not need to comply with anti-money laundering obligations. Koreans will also not be required to pay taxes on NFTs even though they will need to pay taxes on cryptocurrencies starting in January 2022.
