Digital assets and related metaverse technologies have been added to the list of areas that South Korea financial regulators are to pay special attention to next year.
The agencies said this week in their annual work plan that they will tighten its control of new trading assets. It specifically focuses on non-fungible tokens (NFTs), a sector whose rapid growth has become a source of concern for regulators. They will also work to improve its control of the metaverse. Which is a burgeoning industry that has garnered the attention of some of the world’s most powerful corporations, including Meta and Microsoft.
At a time when the country’s digital asset market is booming, the Financial Supervisory Service (FSS) seeks to protect consumers. In its yearly work plan, the FSS stated that it will establish countermeasures against elements that damage consumers in this booming sector.
This latest discovery comes after the regulator announced earlier this month that it would increase its inspection of IPOs of developing market companies, including NFTs and metaverse.
NFTs have recently gained popularity in South Korea. Despite this, the government of South Korea has been steadfast in its opposition to their recognition as financial assets. The Financial Services Commission (FSC) declared in November 2021 that NFTs were not virtual assets. And therefore, that they would not be regulated in the same way.
According to the FSC, NFTs are part of the collectibles category rather than payments or investments.
An FSC official noted at the tim; “NFTs are not regulated, according to the basic position of the International Anti-Money Laundering Organization (FATF)”.
The metaverse is strongly gaining popularity in the local market. Four metaverse ETFs have launched as of October 2021, with more than $1 billion purportedly invested as of January.