Recently, business areas relating to NFTs (Non-Fungible Token) are rapidly and limitlessly expanding in Korea, to encompass music, fine arts, games, sports, entertainment and metaverse. The core characteristics of NFTs, which are non-substitutable tokens, is the fact that it is ‘non-fungible’ because a unique ID (token ID) is given using blockchain technology, and for this reason, it is easier to prove the ‘originality’ of the underlying assets associated with an NFT. In addition, when NFT is used, it is possible to record the owner information and transaction details of a particular NFT on a blockchain that is relatively difficult to forge or fabricate.
As NFTs linked to various types of tangible or non-tangible underlying assets are minted (issuance) and distributed all over the world, it gives rise to financial services related to NFTs as well. Governmental authorities of many countries are currently reviewing how NFTs, which draw a large public attention like the case of virtual assets, should be regulated, and there are a number of studies currently being conducted in Korea regarding the necessity and direction of the regulations of NFTs.
In light of such recent development and progress, we would like to discuss in four parts key legal issues that need to be considered in relation to any NFT-related project. We will cover the legal nature of NFT and key issues for each party involved in the NFT lifecycle in Part 1. From Part 2 to Part 4, we will focus on legal issues related to intellectual property rights, game industry, and tax. Please refer to the attachment for further details.
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