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The Financial Services Commission (FSC) in South Korea has insisted that nonfungible tokens (NFTs) are not classified as virtual assets, and hence will not be regulated. The financial regulator said this in a public statement issued earlier today.
South Korea Decides ‘No Regulation’ For NFTs
FSC’s decision not to regulate NFTs follows shortly after reviewing the updated guidelines of the Financial Action Task Force’s (FATF). According to the Oct. 28 guidance report from FATF, NFTs or otherwise crypto-collectibles, depending on whatever characteristics they possess, will generally not be considered as Virtual Assets.
Speaking to a group of reporters about the decision on November 5, a representative from a branch of the FSC issued a statement. According to the official, South Korea will not be issuing regulations for NFTs because of the position of FATF on NFT regulation.
FSC is obviously focusing on the fact that FATF believes that NFTs are unique, rather than interchangeable, — the true meaning of being ‘nonfungible’. Not only that, the decision was also informed because, instead of being used as a means of payment, NFTs are used as collector items.
Experts Beg To Differ
According to reports by South Korean newspaper Herald Corp, some experts in Korea are critical of the decision not to regulate NFTs. They raised concerns about the fact that NFT prices can be manipulated, hence can be used for money laundering as issuers will not be required to comply with any anti-money laundering requirements. Koreans will also not have to pay any taxes on NFTs even though they must start to pay taxes on crypto beginning in early 2022.
Whereas, Dunamu, the parent company of Upbit crypto exchange might be please with the recent news.
There have been reports that Dunamu and its high flying new partner Hybe are set to delve into the NFT space together with collectibles based on the wildly popular BTS K-pop group.
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