The Financial Services Commission (FSC) of South Korea has adjusted its position on nonfungible tokens (NFTs) by moving to categorize specific types of NFTs as virtual assets. In a recent announcement on June 10, the FSC delineated that NFTs with attributes like divisibility, large-scale production, or usability for payments would be included under the new virtual asset framework in South Korea. This reclassification now requires businesses issuing NFTs classified as virtual assets to report to the regulatory authorities in South Korea. The modification precedes the upcoming implementation of the nation's initial cryptocurrency regulatory structure on July 19. Jeon Yo-seop, who heads the Financial Innovation Planning division at the FSC, emphasized the possibility of large-scale NFT collections being used as a form of currency. He illustrated a scenario where a collection comprising a million NFTs could be exchanged and employed as a medium of exchange akin to cryptocurrencies. Nevertheless, the FSC specified that there would be no uniform standard for labeling NFTs as virtual assets, favoring a case-specific evaluation approach. Additionally, NFTs exhibiting similarities to financial securities as outlined in South Korea's Capital Markets Act might be categorized accordingly. This nuanced strategy showcases the FSC's dedication to tailored regulation, ensuring precise classification based on individual NFT characteristics. To strengthen consumer protection and regulatory adherence, the FSC has introduced guidelines stipulating that NFTs designated as virtual assets could potentially earn interest when deposited on cryptocurrency exchanges. While aligned with the impending Virtual Asset User Protection Act, this provision does not extend interest-generation benefits to regular NFTs or central bank digital currencies (CBDCs). This step reflects South Korea's proactive measures in bolstering supervision and regulation within the cryptocurrency domain to deter misconduct and preserve investor welfare. As the regulatory environment undergoes reconfiguration, stakeholders are gearing up to navigate the evolving regulatory framework, characterized by heightened transparency and accountability.