Korea Financial Services Commission confirms that NFTs are not regulated

Currently, major international and local companies in various countries have revealed plans to expand their business to the NFT platform.

South Korea is no exception. The share price of Wemade, a South Korean game company participating in the NFT, has nearly tripled in just one month, and the stock of the auction platform “Seoul Auction” has almost doubled, which is enough to show the influence of the NFT.

The government has been inconclusive about the characterization of its NFT, and the taxation of transaction NFT is still a blind spot, because NFT is not regarded as a virtual asset.

Korea Financial Services Commission confirms that NFTs are not regulated

However, the Korean government is considering whether to create a separate tax category for NFTs.

Finance Minister Hong Nam Ki said last month:

“The government is considering whether NFTs can be regarded as virtual assets, because there is always a need to include them in the category of virtual assets for taxation.” 

As the government announced a plan to tax the trading income of virtual assets such as cryptocurrency from January next year, it now has less than two months to formulate a detailed plan.

Whether it is for cryptocurrency assets or NFTs, which is too new an industry, the government’s policies cannot keep up in time, so it is easy to be used for tax evasion or money laundering.

Today, the South Korean Financial Services Commission (FSC) reiterated in today’s public statement that non-fungible tokens (NFT) are not virtual assets and will not be regulated.

On October 28, a guidance report from the Financial Action Task Force (FATF) stated that “NFT or encrypted collectibles, based on their characteristics, are not generally regarded as [virtual assets].”

Korea Financial Services Commission confirms that NFTs are not regulated

After reviewing the updated guidelines, the Korean government reconfirmed its decision to keep the NFT unregulated.

This also shows that the South Korean financial regulator, FATF, believes that NFT is “unique, not fungible”-this is of course an irreplaceable definition-NFT is used as a collection rather than as a means of payment.

But not all South Korean institutions agree with this. The South Korean newspaper Herald Corp reported that South Korean experts believe that NFT prices can be manipulated and used for money laundering, and because they are not considered virtual assets, issuers are not required to comply with anti-money laundering obligations.

Even from January 2022, South Koreans will need to pay taxes on cryptocurrencies, and they will not need to pay taxes on NFTs.

The most beneficial of this policy is undoubtedly Dunamu, the parent company of Upbit, South Korea’s largest virtual currency trading platform.

Recently, Hybe, the agency behind the K-pop band BTS, and Dunamu, the operator of the cryptocurrency exchange Upbit, have agreed to form a joint venture to develop NFTs.

The two companies will exchange shares through a third-party allotment. Hybe will acquire a 2.5% stake in Dunamu worth 500 billion won ($423 million), and Dunamu will purchase 700 billion won of newly issued Hybe shares, which account for 5.6 percent of the music organization. % Of shares.

On the second day of the announcement, Hybe’s stock price rose 4.9%.

And the time when the government released the news is also very interesting. From November 4th to November 6, Busan City, South Korea and the Busan Blockchain Industry Association are hosting the largest NFT (Non-Fungible Token) convention and exhibition event——” NFT BUSAN 2021″.

Korea Financial Services Commission confirms that NFTs are not regulated

Obviously, South Korea’s NFT development will gain more development freedom and development opportunities because of this policy.

In the context of the exponential growth of the global NFT trading market, governments and legislatures must keep up with rapid changes, otherwise the laws surrounding emerging assets will continue to trouble governments.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/korea-financial-services-commission-confirms-that-nfts-are-not-regulated/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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