The newest update to South Korean Law: NFTs are not assets. This means the FTC, the Financial Service Commission of South Korea, decided there is no need for regulation in the industry. While getting a tight grip over the newly-created unregulated asset category, the exemption is a relief for the NFT community.
Why is the South Koreans’ law so easy on NFTs?
The Korean Herald quoted an unknown FTC official saying, “[NFTs are] digital assets that are unique, rather than interchangeable, and [people] in practice [consider it] as collectibles rather than as payment or investment instruments.”
In short, since customers mostly treat NFTs as an art form and not a means of investment or payment, there is no need for regulation. However, according to the guidelines of the International Anti-Money Laundering Organization (FATF), that may not always be so. Reportedly, South Korean law authorities can treat NFTs as assets if used otherwise.
That means if there’s an incident of treating NFTs as a mode of payment, authorities will have the power to regulate it.
Leaving a bit of wiggle room there, authorities aren’t still closing the possibilities. Sources claim the Finance Minister to say discussions will continue as there is a demand to regulate NFTs.
The argument that is going around the most is, NFTs’ value is determined by their scarcity. It doesn’t come with any intrinsic value, as a result, it’s not a viable means of investment or payment.
The Herald also reports of anonymous sources sharing concerns about price manipulation and other factors. Some suggest creating supervisory frameworks specifically for NFTs as a way to stabilize the market.
NFTs and K-Pop: A match made in Heaven
Although law officials are still deciding their next step, the South Koreans have spoken in favor of NFTs. The famous K-pop boy band BTS is joining the trend, opening a new and massive market.
Hybe, BTS’ managing company announced their partnership with Dunamu last week. The parent company of the Korean exchange Upbit bought a 5% stake in Hybe, while the latter bought 2.5%.=The duo is planning a new NFT Marketplace, integrating the K-pop industry with crypto.
Animoca Brands, a major figure in the crypto industry, also plans to launch a K-pop metaverse with Cube Entertainment. Thanks to Cube’s popularity and connections, it may have great potential to dominate the industry.
There’s no doubt: South Korean law on NFTs, or lack thereof, makes it a strong region for the crypto industry.While countries like China ban everything regarding crypto and others still deciding their path, it’s crucial to find a middle ground. Transitioning from traditional finance to a blockchain-based economy won’t be easy, but steps like these pave our way to the future.