When Is Your Game NFT a Crypto Asset? Korea's 2024 Rulebook, Explained

Call it a "collectible", a "skin" or a "hero card": Korea's financial regulators do not care. Since the summer of 2024, the name on an NFT has stopped mattering. What counts is what the token actually does.

On 10 June 2024, the Financial Services Commission (FSC), working with the Financial Intelligence Unit and the Financial Supervisory Service, published guidelines on when an NFT should be treated as a virtual asset. Five weeks later, on 19 July 2024, Korea's Virtual Asset User Protection Act took effect. Together they decide which game NFTs fall under crypto regulation, and they line up neatly with how Korean courts had already been treating play-to-earn games.

Substance over labels

The guideline's starting point is simple: whether an NFT is a virtual asset depends on its substance, not on what it is called or which technology it uses. Regulators check in a fixed order. First, is the NFT a security? The FSC had already published guidelines on token securities in February 2023, and five standard security types plus the catch-all "investment contract" are reviewed first. Only if the NFT is not a security do regulators ask whether it is a virtual asset.

The red flags

According to the guideline as summarised by Korean law firms, an NFT is likely to be a virtual asset if it has any one of these traits:

• Mass or large-series issuance, so that each token is easily replaced by another.
• Divisibility that substantially weakens its uniqueness, such as splitting one NFT into many fractions.
• Use, directly or indirectly, as a means of payment for goods or services.
• The ability to be exchanged with unspecified people for virtual assets, or to pay for goods or services linked to other virtual assets.

On the other side, an NFT is likely not a virtual asset if its main value is something other than economic value, if its economic function is minimal, or if it is hard to see it as a tradable electronic certificate. The enforcement decree was expected to exclude NFTs mainly for collecting, NFTs that only confirm transactions between parties, and unique, non-replaceable NFTs, unless they can be used to pay.

What it means for game items

Run a typical blockchain game through those tests and the results are uncomfortable. Many games mint the same item thousands of times, let players sell items for a token and use the token to buy other items. That is mass issuance, exchange with strangers and payment use, all at once.

The courts had already been here. In January 2023, the Seoul Administrative Court rejected Skypeople's challenge over Five Stars for Klaytn and observed that when a game issues a very large number of NFTs, they can be fungible and convertible like ordinary tokens (the court cases). The 2024 guideline put a version of that reasoning into regulatory policy.

The law behind the guideline

The Virtual Asset User Protection Act, passed in 2023, is Korea's first law written specifically for crypto markets. It protects users' deposits and assets held by exchanges and bans unfair trading such as market manipulation and trading on undisclosed information. For game companies with their own tokens, that last part is the big change: market-moving statements about a game coin are now judged under a crypto-specific statute.

The timing showed up in court. When a Seoul court acquitted Wemade's former CEO in July 2025 over 2022 statements about the WEMIX token, the judge noted that the new law could not apply retroactively, and suggested the defendant consider how the same conduct would be judged today (the WEMIX trial).

Why it matters

For players, the guideline is a useful reality check. An item you can sell for a token, that exists in thousands of copies and can buy other items, may be legally closer to a coin than to a sword. For studios, it means token design decisions, such as how many copies to mint and whether to allow fractions, are also legal decisions.

WGC's take: Korea has quietly built one of the clearest NFT tests anywhere. It does not ban game NFTs, but it removes the comforting idea that calling something a collectible keeps it out of financial law. Expect it to matter more if the game law's prize ban is ever narrowed (the debate).