{"id":22425,"date":"2024-06-10T14:00:20","date_gmt":"2024-06-10T11:00:20","guid":{"rendered":"https:\/\/coinengineer.io\/?p=22425"},"modified":"2024-06-10T09:19:32","modified_gmt":"2024-06-10T06:19:32","slug":"nfts-under-new-scrutiny-in-south-korea","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/nfts-under-new-scrutiny-in-south-korea\/","title":{"rendered":"NFTs Under New Scrutiny in South Korea"},"content":{"rendered":"<p>According to <a href=\"https:\/\/en.yna.co.kr\/\">Yonhap news agency<\/a>, the top financial regulator in South Korea released fresh rules targeted at non-fungible tokens on Monday to provide regulatory clarification on <strong>NFTs<\/strong>.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_71 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/coinengineer.net\/blog\/nfts-under-new-scrutiny-in-south-korea\/#NFT_Classification_Criteria\" title=\"NFT Classification Criteria\">NFT Classification Criteria<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/coinengineer.net\/blog\/nfts-under-new-scrutiny-in-south-korea\/#Case-by-Case_Analysis_for_NFTs\" title=\"Case-by-Case Analysis for NFTs\">Case-by-Case Analysis for NFTs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/coinengineer.net\/blog\/nfts-under-new-scrutiny-in-south-korea\/#Protecting_User_Funds\" title=\"Protecting User Funds\">Protecting User Funds<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"NFT_Classification_Criteria\"><\/span>NFT Classification Criteria<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>According to the new rules, some <strong>NFTs<\/strong> will be controlled by the Financial Services Commission (FSC) as conventional cryptocurrencies should they lose the special characteristics that set them apart from cryptocurrencies.<\/p>\n<p>Under regulations, the FSC might identify an <strong>NFT<\/strong> as crypto if it is mass-produced, reasonably exchangeable, able of being fractionalized, or utilized for payments for goods and services, Yonhap reported, citing the rules.<\/p>\n<p>Conversely, ordinary <strong>NFTs<\/strong> would be digital tokens with limited to zero economic value and a non-transferable nature. An <strong>NFT<\/strong> ticket for a performance or proof of transaction would be two instances of such.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Case-by-Case_Analysis_for_NFTs\"><\/span>Case-by-Case Analysis for NFTs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An FSC official informed Yonhap that a collection with around a million <strong>NFTs<\/strong> issued may be sold and utilized as a payment method akin to cryptocurrencies. The FSC noted, however, that it would distinguish <strong>NFTs<\/strong> as crypto in the regulatory setting by means of a case-by-case analysis and that there would not be one absolute criterion applied to understand <strong>NFTs<\/strong> as crypto.<\/p>\n<p><span style=\"color: #0000ff\"><em>This Might Interest You: <a style=\"color: #0000ff\" href=\"https:\/\/coinengineer.net\/blog\/ethereum-economic-conflict-capitalism-vs-socialism\/\">Ethereum\u2019s Economic Conflict: Capitalism vs. Socialism<\/a><\/em><\/span><\/p>\n<p>According to the new rule book published by the FSC, an <strong>NFT<\/strong> can also be categorized as a financial security, provided it exhibits matching traits outlined in the Capital Markets Act of the nation.<\/p>\n<p>The new rules come before South Korea&#8217;s first crypto-oriented legislative framework, which will be in force starting on July 19. Named the Virtual Asset User Protection Act, the law seeks to abolish illegal market activities, including exploiting unreported information for crypto investments, market price manipulation, and fraudulent transaction participation.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Protecting_User_Funds\"><\/span>Protecting User Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In order to preserve user funds and register in insurance programs for possible user reimbursement in the case of security breaches, the act also mandates that bitcoin service providers guard over 80% of deposits in cold storage.<\/p>\n<p>Part of South Korea&#8217;s two-part legislation aiming at creating a legal framework for the cryptocurrency sector is the new law. Currently under development, the second half of the control centers on standardizing crypto token issuing and information disclosure for investors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to Yonhap news agency, the top financial regulator in South Korea released fresh rules targeted at non-fungible tokens on Monday to provide regulatory clarification on NFTs. NFT Classification Criteria According to the new rules, some NFTs will be controlled by the Financial Services Commission (FSC) as conventional cryptocurrencies should they lose the special characteristics<\/p>\n","protected":false},"author":6,"featured_media":22427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,2],"tags":[459,1999,6750],"class_list":["post-22425","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-news","tag-nfts","tag-south-korea","tag-south-korea-nfts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>NFTs Under New Scrutiny in South Korea - Coin Engineer<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/nfts-under-new-scrutiny-in-south-korea\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NFTs Under New Scrutiny in South Korea - Coin Engineer\" \/>\n<meta property=\"og:description\" content=\"According to Yonhap news agency, the top financial regulator in South Korea released fresh rules targeted at non-fungible tokens on Monday to provide regulatory clarification on NFTs. 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