According to Odaily, South Korea's 'Virtual Asset User Protection Law' is set to take effect on July 19, and regulatory authorities have released guidelines on whether Non-Fungible Tokens (NFTs) are considered virtual assets. Previously, financial authorities announced through the 'Virtual Asset User Protection Law Enforcement Order' that NFTs are not considered virtual assets. This principle has been retained, but NFTs that have characteristics of virtual assets may be considered as such. Companies issuing NFTs must declare their business as a virtual asset business to the competent department.
The Financial Services Commission announced the NFT guidelines containing this information on the 10th. After the implementation of the 'Virtual Asset User Protection Law', NFTs generally traded for the purpose of 'content collection' will be excluded from the scope of virtual assets. For ambiguous NFTs, the application of the law depends on the substance of the NFT, determined in the order of 'securities → virtual assets'. It is first determined whether the NFT is a security, and then its essence is determined to see if it belongs to virtual assets.
Whether it belongs to virtual assets is judged according to the following criteria: 1) Large issuance or large-scale series, with high substitutability; 2) Can be divided, with significantly weakened uniqueness; 3) Direct or indirect payment method for specific goods or services; 4) Virtual asset exchanges can be conducted between unspecified persons, or payments can be made for other virtual asset-related goods or services.
