Reporting and Compliance Requirements
Entities issuing NFTs are now required to register their operations, with sanctions for non-compliance.
Determining whether NFTs qualify as securities or virtual assets will involve consultation of South Korea’s ‘Token Securities Guidelines’ provided by the Financial Services Commission. This assessment considers the type of content held by investors, with securities legislation applying if the content is deemed a security, irrespective of format or technology.
The Financial Services Commission (FSC) also clarified that NFTs will be individually assessed based on factors such as their exchange potential, mass production, potential for division, and usability in transactions.
Non-compliance with these requirements can result in criminal penalties and the FSC encourages businesses unsure of their NFTs’ status to seek guidance.
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Blockchain enthusiast and lifelong gamer.
