South Korea’s Financial Services Commission (FSC) announced new regulations, classifying specific non-fungible tokens (NFTs) as virtual assets, akin to cryptocurrencies. The guidelines target mass-produced, divisible NFTs that can be used for payments, aiming to provide regulatory clarity in the evolving digital asset sector.
The FSC will evaluate NFT collections on a case-by-case basis, ensuring a tailored regulatory approach. This move reflects South Korea’s recognition of the diverse functionalities of digital tokens, potentially leading to a more regulated and stable NFT market.
The announcement comes ahead of the Virtual Asset User Protection Act, effective July 19, 2024, which mandates crypto service providers to protect user deposits through cold storage and participate in insurance schemes to compensate users in case of security breaches.
