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 reviewing the Financial Action Task Force (FATF) in the US. The guidance report issued by FATF states that “NFTs or crypto-collectables based on their characteristics are generally not considered virtual assets.”
Due to the FATF position on NFT regulation, we will not issue regulations for NFTs.– FSC Official Statement
The majority of experts in Korea believe that since NFTs are not considered virtual assets. Therefore, issuers will not be required to conform to anti-money laundering obligations.
South Korean experts believe NFTs prices can be manipulated
While NFT may have been soaring high in popularity, South Korean authorities are still sceptical 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.
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 many profits for Dunamu, South Korea’s leading fintech company. Dunamu maintains a dominant position in the cryptocurrency trading sector in the country and is set to partner up with Hybe Entertainment– a major 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 would 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. At the same time, Dunamu will be acquiring a 5.6% stake in Hybe Entertainment, which is worth $592.4 million.
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