In a public statement issued Saturday, the Financial Service Commission (FSC) of South Korea reiterated that non-fungible tokens are not virtual assets and hence would not be subject to regulation.
After a review by the Financial Action Task Force (FATF) in the United States, the decision to keep NFTs unregulated was confirmed.
“NFTs or crypto-collectibles based on their characteristics are generally not regarded as virtual assets,” the FATF guidance paper said.
According to a new statement from the FSC, the agency will not “establish regulations for NFTs because of the FATF position on NFT regulation.”
Doubts on NFT innovation
Despite the fact that NFTs have become increasingly popular, South Korean authorities remain suspicious of the technology.
Financial experts in South Korea believe NFT prices can be manipulated and exploited for money laundering purposes, local news outlet Herald Corp reported.
A big number of Korean market observers believe that because NFTs are not considered virtual assets, issuers will be exempt from anti-money laundering regulations.
Additionally, South Korean citizens will not be required to pay taxes on NFTs until 2022, when they will be obligated to pay taxes on cryptocurrencies.
Hybe and Dunamu team up
Meanwhile, the revelation that NFTs will remain unregulated could bring in a lot of money for Dunamu, South Korea’s top fintech firm.
Dunamu holds a commanding position in the country’s bitcoin trading business and is expected to collaborate with Hybe Entertainment, a major entertainment agency that represents the popular boy band BTS.
Despite an uncertain NFT regulatory structure in the country, both companies are optimistic about gaining additional earnings.
Hybe had earlier disclosed it will soon be unveiling KPOP-inspired BTS digital art collections in tandem with Dunamu.
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