Crypto in South Korea – ‘Metaverse Seoul’, NFT Gambling Ban and Launch of STOs

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(Kitco News) – South Korea continues to be at the forefront of the adoption and integration of blockchain technology, as the Asian nation has launched a virtual replica of its capital Seoul, the first phase of a project that has been dubbed “Metaverse Seoul.” South Korea said the project is reportedly the first city-backed public metaverse platform in the world.

According to a press release announcing the project, Metaverse Seoul is a three-part project expected to be completed in 2026. During the first phase, Metaverse Seoul is focused on improving the efficiency of public administration services and will allow citizens to use personal avatars to explore platform and access a range of services such as obtaining proof of citizenship, tax advice, youth guidance and a support center for struggling businesses.

The second phase, which is expected to go live in 2024, will expand the services available to include property consultancy and connect foreign investors with local industry. The third phase will focus on integrating virtual and augmented reality technology to help manage the city’s infrastructure. There are also plans to introduce blockchain technologies including cryptocurrency.

Court decisions against P2E games

In evidence that the country also remains focused on the regulatory side of the crypto industry, a court in South Korea has ruled against the release of a blockchain-based play-to-earn (P2E) game after ruling that the game is not fungible. tokens (NFT) promote speculation.

According to a report by Yonhap News Agency, South Korean game developer SkyPeople, the game studio behind the NFT game Five Stars, filed an appeal against an earlier ruling arguing that in-game items and characters marked as NFTs are not rewards but registrations of ownership. .

The Seoul Administrative Court disagreed with that line of thinking, rejecting SkyPeople’s appeal of the Game Rating Administration Committee’s decision not to process the age rating for Five Stars. In order to be released to the public in South Korea, all video games must receive an age rating from the committee.

At the center of Five Stars’ problem is the fact that players can craft characters and items into tradable NFTs on the Klaytn blockchain. The court said that NFTs cannot be classified as gaming objects only if they are also traded on exchanges.

The Game Rating Administration previously banned games involving cryptocurrencies, or NFTs, citing a local law that prohibits firms from promoting speculative behavior to players via cash rewards.

Since then, South Korean P2E game makers have only released their blockchain-based games abroad, awaiting the fulfillment of a promise made by South Korean President Yoon Suk-yeol that he would abolish the gaming-for-profit ban. Yoon has previously said that developing technologies related to the metaverse is a national priority.

Companies preparing to launch security token offerings

Further proving that both the public and private sectors in South Korea are dedicated to blockchain technology, a report from the Busan Ilbo indicates that several high-profile companies in the country are preparing to launch security token-related services this year.

According to the report, several firms are now waiting for the Financial Services Commission (FSC) to publish industry guidelines on how to legally offer STOs. The FSC is scheduled to make an announcement on STOs on 19 January.

While details of the announcement are scarce, several domestic securities firms have been “busy preparing digital asset platforms” that can handle and/or issue tokens in anticipation of the FSC giving them the go-ahead to offer such services later this month.

The companies looking to offer STOs to help grow South Korea’s digital asset ecosystem include the Korea Exchange – the country’s sole stock exchange operator – banking giants Kookmin and Shinhan, and Kiwoom Securities.

The city of Busan is also looking to make STOs an integral part of the Digital Assets Exchange project, which is being developed in conjunction with several top international cryptocurrency exchanges, including Binance.

Currently, all forms of crypto-asset issuance are prohibited in South Korea, but both the FSC and President Yoon Suk-yeol have indicated that they intend to implement changes to this rule.