when

Read

South Korea’s Financial Services Commission (FSC) is changing its stance regarding nonfungible tokens (NFTs), looking to classify some of them as Virtual assets. 
<a href="https://crypto.news/there-is-more-to-nfts-than-a-marketing-tool-for-corporations-opinion/" rel="">NFTs</a> are primarily unique assets that cannot be replicated, traits that differentiate them from cryptocurrencies would be treated as virtual assets, a <a href="https://www.news1.kr/articles/?5442047" target="_blank" rel="">June 10 report by South Korea’s FSC noted</a>. 
Specifically, the report that NFTs are divisible, can be produced in masses, or can be used as a means of payment, all of which are now classified under South Korea’s newest framework. 
Businesses that issue NFTs classified as virtual assets are now obliged to report it to the South Korean watchdog. 
The new directive comes ahead of <a href="https://crypto.news/south-korea-enacts-comprehensive-laws-to-protect-crypto-users/" rel="">the nation’s first crypto regulatory framework</a> set to be implemented on July 19. 
According to Jeon Yo-seop, the FSC’s Financial Innovation Planning head,&nbsp; NFT collections minted in huge quantities are most likely to be used as payment. 
As an example, the <a href="https://www.yna.co.kr/view/AKR20240610071100002?input=1195m" target="_blank" rel="">official stated</a> that if one million NFTs were issued in a collection, they could be traded and used as payment, just like cryptocurrencies. 
He suggested that there wouldn’t be one single standard to classify NFTs as virtual assets. Rather, the FSC will make the distinction via a case-by-case review approach. 
Further, if an NFT possesses characteristics of financial security as detailed in the country’s Capital Markets Act, they may be classified as securities. 
 You might also like: <a href="https://crypto.news/south-korean-won-tops-global-crypto-trading-overthrowing-usd/" rel=""> South Korean won tops global crypto trading, overthrowing USD </a> 
With the implementation of the new guidelines, some NFTs may even be eligible to receive interest when deposited in an exchange. This is per a <a href="https://m.news.nate.com/view/20231210n12170" target="_blank" rel="">notice from the FSC</a>, issued late last year, that mandates virtual assets deposited on crypto exchanges to be eligible for interest generation. 
However, regular NFTs and CBDCs are excluded from this benefit. 
The new framework is a part of South Korea’s crypto legislation dubbed the Virtual Asset User Protection Act. Set to come into force a week later, it seeks to criminalize malpractices such as using undisclosed information for crypto investments, manipulating market prices, and engaging in fraudulent transactions. 
The bill <a href="https://crypto.news/south-korea-enacts-comprehensive-laws-to-protect-crypto-users/" rel="">was passed in 2023</a> by the nation’s National Assembly. Cryptocurrency-focused entities were subsequently given a one-year grace period to comply with the regulations. 
To complement these efforts, South Korean regulators have also launched a <a href="https://crypto.news/south-korea-to-introduce-crypto-crime-investigation-unit/" rel="">crypto crimes unit</a>. Dubbed the <a href="https://www.kimchang.com/en/insights/detail.kc?sch_section=4&amp;idx=28044" target="_blank" rel="">Joint Virtual Asset Crime Investigation Unit</a>, the entity comprised 30 experts from seven national agencies.&nbsp; 
 Read more: <a href="https://crypto.news/south-koreas-ministry-of-justice-forms-task-force-to-damper-crypto-crimes/" rel=""> South Korea’s Ministry of Justice forms task force to damper crypto crimes </a>

South Korea to classify some NFTs as Virtual Assets ahead of new crypto regulations

crypto.news

Other articles published on Jun 10, 2024

The Future of Blockchain-Based Tokens: Bitgert, Toncoin, Arbitrum, Polkadot

Surprising NFT Decision from South Korea! Financial Regulatory Authority Changed NFTs Status!

DogeVerse and ChainGPT Investors Are Shifting Towards The Best Presale of 2024: MoonBag Crypto

Gym Pepe to Skyrocket 11,000% as KuCoin Listing Announced, as Shiba Inu and Dogecoin Struggle

Floki Name Service Now Launched Exclusively on BNB Chain Mainnet

Hacker Moves $47.7M to Tornado Cash

Join our free newsletter for daily crypto updates!