[Platform Column] Will NFT coins be classified as securities?

The subject of NFT ownership has started with digital files or game items and metaverse content, but is gradually moving to physical assets. Notable examples include artwork and music. Recently, ownership rights of items with collector value, such as celebrity and idol memorabilia and merchandise, have begun to be sold as NFTs. In particular, physical asset-based NFTs are being studied from a legal perspective.

Meanwhile, there are ongoing disputes regarding whether the token/coin falls under the definition of “securities” in financial regulations. If a coin is interpreted as a security from a legal standpoint, it will be subject to various regulations similar to other financial investment products such as stocks and bonds. The U.S. Securities and Exchange Commission is leading the way in determining the securities status of each coin, but a full-scale discussion has not yet taken place in Korea.

However, unlike existing virtual currencies, NFTs represent ownership of physical assets. Considering that REITs, which divide and issue ownership and revenue of real estate as securities and trade them freely, are widely known in the market, NFTs have the potential to be classified as securities depending on their nature and form.

Partner Attorney An Il-won contributed a column to Platum regarding NFT coin legal issues. Please check the Platum column for more detailed information. 

If you need legal consultation related to NFTs, please feel free to contact Law Firm Veat.

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