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Korea’s FSC confirms that NFTs will not be regulated

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According to the South Korean Financial Services Commission (FSC), non-fungible tokens (NFTs) do not match the definition of “virtual assets”. Local newspaper HeraldCorp reported this.

“According to the initial point of view of the Financial Action Task Force’s (FATF), NFTs are not regulated”. An FSC representative told the publication.

Thus, on October 28, FATF published revised guidelines for the crypto industry. Moreover, according to the document, NFTs are not subject to the recommendations of FATF, if using them as collectibles, and not for payments and investments.

The FATF

In addition, the FATF noted that local regulators should, in each case, consider the application of rules for cryptocurrencies in relation to these assets.

“In order to use them as a means of payment, it is necessary to issue a very large amount. But there is practically no reason to do this since rarity is valued in the NFT,” the FSC official said.

Koreans will also be exempt from paying taxes on NFTs until January 2022. However, they will pay taxes on cryptocurrencies. The tax will amount to 20% of the profit received exceeding 2.5 million Korean won (~$2105).

BTS enters NFT market

A blockchain-based fintech startup Dunamu, the parent company of the Upbit crypto exchange; which has a near-monopoly on crypto trading in the country, will most likely pleased with the news.

Dunamu and its high-profile new partner Hybe are ready to enter the NFT arena. With collectibles based on the wildly popular BTS K-pop group. Hybe is the entertainment group behind the group, and it recently announced that it would purchase a 2.5% stake in Dunamu for a reported $423.1 million. Dunamu will pay $592.4 million for a 5.6% stake in Hybe as part of the deal.

Recall that earlier in September, the ruling Toburo Democratic Party in South Korea proposed to postpone the introduction of a tax for Bitcoin traders. Noh Woong-rae, a member of the National Assembly, said that the introduction of the tax is not technically prepared. According to him, the ministry’s policy on this issue is “administration that ignores reality.”

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