South Korea to Classify Mass-Issued NFTs as Virtual Assets

With the 'Virtual Asset User Protection Act' taking effect on July 19, South Korea's Financial Services Commission (FSC) has issued guidelines on when non-fungible tokens (NFTs) should be considered virtual assets. General NFTs traded for collection will remain outside this scope, but those resembling virtual assets will face regulation. Key criteria for classification include mass issuance, divisibility, and usage as a payment method. NFTs issued in large quantities, divisible NFTs, or those used for payments will be regulated as virtual assets. Businesses issuing such NFTs must report to authorities under the ‘Specific Financial Information Act,’ or face criminal penalties. The FSC provides consultation services for businesses unsure about their NFTs' classification.

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