South Korean Court Rules NFT Game Items Unfit for Trading

On Friday, a court in South Korea ruled against the release of a blockchain-based play-to-earn (P2E) game called Five Stars.

The Seoul Administrative Court dismissed the developer’s appeal against the Game Rating Administration Committee’s decision not to process the age rating for the game.

At the heart of the issue is the use of non-fungible tokens (NFTs). The court ruled that NFTs are not game items if they are traded on exchanges, as is the case with Five Stars.

NFTs minted in-game can be used to purchase items and characters, and can be sold on exchanges. As such, the court determined that this promotes speculation and is in violation of local law that prohibits such behavior.

The ruling means that Five Stars will not be able to be released in South Korea, though the developer is still able to release the game in other countries.

South Korean President Yoon Suk-yeol had promised to abolish the P2E ban in his election campaign last year. Although the ban remains in place, it is likely that the President will continue to push for its repeal.