South Korean Crypto Firm to Evaluate 1,300 Coins in Circulation

Previously, South Korea's Financial Services Commission (FSC) has launched new regulations that classify certain Non Fungible Tokens (NFTs) as virtual assets, similar to cryptocurrencies.

As reported by Yahoo Finance, Tuesday (11/6/2024), announced on Monday, the guidelines stipulate that NFTs that are mass-produced, divisible, and can be used for payments will be subject to this new categorization.

The regulatory move aims to provide clarity in the growing digital asset sector and ensure certain NFTs are governed by the same rules as traditional cryptocurrencies.

Crypto-Like Use of NFTsThe FSC guidelines are a response to the increasing use of NFTs in ways that mirror cryptocurrencies, targeting cryptocurrencies that are fungible and do not have unique characteristics.

The FSC said it would review NFT collections on a case-by-case basis to determine their classification, indicating a tailored regulatory approach rather than a blanket policy.

The decision reflects South Korea’s recognition of the diverse functions of digital tokens, potentially leading to a more regulated and stable NFT market, as well as offering clearer direction for creators and investors.

The announcement precedes the implementation of South Korea's comprehensive crypto regulation, the Virtual Asset Users Protection Act, which is scheduled for July 19, 2024.

This act is designed to curb illegal activity in the crypto space and requires crypto service providers to protect user deposits, primarily through cold storage, and to participate in insurance schemes to compensate users in the event of security breaches.