By Shelly Melancon (Switzerland)
Amidst the explosive growth of DeFi and NFTs, the Government of South Korea has announced that it won’t regulate the non fungible token (NFT) market in its domain. The NFT market in Korea is large and expanding at a rapid rate. NFT holders have recently expressed concerns about a possible regulation by the government but the government has now confirmed that the market will remain unregulated.
This was contained in a recent public statement given by South Korea’s Financial Services Commission (FSC). The FSC said that, in line with the FATF guidelines, NFTs are non-virtual tokens and are therefore not subject to regulation. The FATF (Financial Action Task Force) recently reviewed its guidelines on cryptocurrencies and virtual tokens. At the end of the review, the FATF stated that all crypto-collectibles or NFTs are not virtual assets. This clarification has laid the foundations of a strong NFT community that won’t be burdened by several regulations.
In a statement to pressmen, an FSC official said that the FSC would not regulate NFTs because of the FATF’s position on NFTs. This also means that South Koreans will not be taxed on their NFT collections, although from 2022, cryptocurrency assets will be subject to tax laws in the country.
There Are Oppositions to The FSC’s Stand
Although the FSC’s stand to not regulate the NFT market is welcome news to the crypto community, some believe that the government agency is not going about it the right way. Several experts have expressed concerns that NFTs can be used to launder money through price manipulation. They argue that the exemption of NFTs from tax compliance opens a window for money launderers to exploit loopholes in South Korea’s anti-money laundering policies.
The concerns of the financial experts are worthy of note. In principle, NFTs can be misused to launder money and the FSC’s decision to not tax NFT assets makes it even easier for money launderers to violate the law right under its nose. However, there are enough reasons to believe that the government has a fail-safe plan to block that loophole and prosecute anyone found guilty of manipulating NFT prices.
The government of Korea is known for its hard stance against financial crimes and its law enforcement agencies go at full strength to investigate financial misconduct. The country also has a strong anti-money laundering law that has effectively curbed money laundering crimes in the country.
The Crypto Community Is Happy
The news is welcome in Korea’s crypto community, many of whom have held their breaths to know the government’s decision. The biggest celebration will perhaps be held by Dunamu, the parent company of Korea’s largest cryptocurrency exchange, Upbit. Upbit is perhaps the only cryptocurrency exchange platform in South Korea with the largest user base and trading volume.
Dunamu has announced a partnership with Hybe, the group behind Korea’s successful BTS K-pop group. Dunamu and Hybe are partnering to explore the NFT market and will be happy that the government is not going to be literally breathing down their necks via NFT regulations.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.