South Korea's Financial Services Commission Issues Guidelines on NFT Treatment and Classification

• South Korea's FSC issues guidelines on NFTs as virtual assets
• NFTs mass-produced, divisible, and usable for payments considered virtual assets
• NFTs with little value treated differently, classified as general NFTs
• NFT collections with high quantities could be used for payments
• NFTs may be treated as securities if they meet Capital Markets Act criteria
• Virtual asset NFTs eligible for interest when deposited on exchanges

Summary :
South Korea's Financial Services Commission (FSC) has issued guidelines regarding the treatment of nonfungible tokens (NFTs) as virtual assets. The FSC will regulate NFTs similarly to cryptocurrencies if they do not possess distinct characteristics that differentiate them from virtual assets. NFTs that are mass-produced, divisible, and can be used for payment will be considered virtual assets. However, NFTs with little to no value, such as those used in ticketing or digital certificates, will be treated differently and classified as general NFTs. The head of the FSC's Financial Innovation Planning, Jeon Yo-seop, stated that NFT collections with high quantities are likely to be used as a form of payment. The FSC will review each collection on a case-by-case basis to determine its classification. Additionally, the guidelines suggest that NFTs could be treated as securities if they exhibit features specified in the country's Capital Markets Act. In preparation for implementing new rules for virtual assets in July 2024, the FSC has issued various guidelines to assist stakeholders in navigating the country's laws. It was previously mentioned that virtual assets must receive interest when deposited on a crypto exchange, but this law does not apply to regular NFTs and central bank digital currencies (CBDCs). However, NFTs classified as virtual assets and used for payment, particularly those issued in large quantities, are eligible for interest.

Sources :

- CoinTelegraph