South Korea is exploring ways to tax non-fungible tokens (NFTs) amid controversies over crypto regulations in the country. NFTs are virtual collectibles that are tied to real-life objects such as games, artwork and music and ownership is locked and transferred on the blockchain, among others. The country aims to use one of its existing laws to tax income earned from buying or selling these virtual assets. The law being considered for taxing NFTs in South Korea is the Act on Specified Financial Transaction Information. It defines cryptocurrencies as “virtual assets” and focuses on a reporting system for cryptocurrency exchanges.
South Korea’s Financial Services Commission (FSC) vice chairman Doh Kyu-sang told the media this week, the Korea Herald informed of,
It’s been a while since it’s regulated NFT Space in South Korea has been surrounded by controversy.
Last month, Finance Minister Hong Nam-ki said during a parliamentary audit session that NFTs should not be classified as virtual assets, contrary to what the FSC is now saying about the NFT space.
In fact, earlier this month the FSC itself stated that NFTs are not virtual assets, and will not be subject to regulation.
At the time, the decision was based on a review by the Financial Action Task Force (FATF). The 2019 guidance for a risk-based approach for virtual assets as well as virtual asset service providers (VASPs) was updated.
“NFTs, or crypto-storages, are generally not considered (virtual assets) by virtue of their characteristics,” report good said.
According to South Korean law, holders of certificates of virtual assets are required to pay a 20 percent tax on the proceeds from selling assets, such as NFT artworks of a well-known artist, The Korea reports. The Herald explained.
NS crypto space Higher investigations are underway in South Korea.
In September this year, a new rule came into existence in the country which mandated crypto exchanges to register with the Financial Intelligence Unit and partner with banks to ensure real name accounts.
More than 60 cryptocurrency exchanges in South Korea notified customers of partial or complete suspension business services,
Meanwhile, regulation decentralized finance Space has been keeping governments around the world on their toes.
NS crypto market It crashed in India after a Parliament agenda listed by the Indian government – seeking to ban the operation of all private cryptocurrencies in the country.