Reporting and Compliance Requirements
Entities issuing NFTs are now required to register their activities, with penalties for non-compliance.
Determining whether NFTs qualify as securities or virtual assets will require consultation of South Korea’s Financial Services Commission’s Token Securities Guidelines. This assessment takes into account the type of content investors own, with securities laws applicable if the content is considered a security, regardless of format or technology.
The Financial Services Commission (FSC) also clarified that NFTs will be assessed individually based on factors such as their exchange potential, mass production, potential for division and usability in transactions.
Failure to comply with these requirements may result in criminal penalties and the FSC encourages companies unsure of the status of their NFTs to seek advice.
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