South Korea’s Financial Services Commission (FSC) has recently released new guidelines defining when non-fungible tokens (NFTs) can be classified as virtual assets, aligning them more closely with crypto.
According to the guidelines, NFTs lacking distinct characteristics from virtual assets will be regulated as cryptocurrencies. This means that NFTs that are produced in large quantities, divisible, and can be used for payments will be classified as virtual assets.
Meanwhile, if the NFTs are not used for economic value, have limited use (such as concert tickets issued in limited quantities), and can’t be traded, they will be classified as general NFTs.
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Jeon Yo-seop, the head of Financial Innovation Planning at the FSC, explained in an interview:
For example, if a million NFTs are issued, there is a possibility that they will be transacted a lot and used for payment.
The FSC clarified that they will evaluate each collection individually with no fixed rule for interpreting NFTs as cryptocurrencies.
Moreover, the guidelines state that NFTs may be deemed securities if they exhibit traits outlined in the Capital Markets Act of South Korea.
Therefore, the FSC’s new guidelines classify NFTs based on their economic use, the potential for payments, and tradeability.
In other news, due to rule changes in South Korea, charitable organizations are now unable to accept crypto as a form of donation.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
