Chinese internet giants remove NFT platforms fearing gov't crackdown

Published at: March 21, 2022

China's leading social media platforms and internet giants have updated their policy to restrict or remove nonfungible token (NFT) platforms, citing a lack of regulatory clarity and fearing government crackdown.

Chinese social media giant WeChat reportedly removed several digital collectible platform accounts for violations of the rules. Digital collection platform Xihu No.1, one of the hyped NFT projects in the market, was among the removed platforms. Another platform called Dongyiyuandian revealed that its official app has been banned, reported a local daily.

WhaleTalk, a digital collectible platform launched by tech giant Ant group, also updated its policy to increase the penalty for using an over-the-counter (OTC) desk for trading NFTs. It is important to note that even though NFTs are not necessarily banned, any form of speculative trading associated with the digital collectible derived tokens is still prohibited. An excerpt from the Google-translated report read:

“Under the background that the compliance of digital collections is not clear, many platforms have begun to actively crackdown on violations to prevent further fermentation of related behaviors.”

The rise in the number of illegal transactions and bot purchases associated with the NFT platforms has prompted several tech giants to take precautionary measures. During the blanket ban on crypto announced in September 2021, any firms found aiding crypto transactions or foreign crypto firms were held accountable. Thus, these firms' recent actions and changes in user agreement policies seem to be done to avoid government crackdown.

Related: Chinese companies embark on a metaverse trademark race

While cryptocurrencies are strictly prohibited in mainland China, the Beijing government had shown no intention of banning NFTs. This was one of the key reasons for the likes of Tencent and Alibaba to file several new NFT patents over the past year. However, the rising popularity of digital collectibles in China has also made it prone to price speculations and frauds.

Tags
Nft
Regulation
China
Alibaba
Tencent
Related Posts
NFT platforms in China grow 5X in four months despite government warnings
The popularity of nonfungible tokens (NFTs) is on the rise as recent data shows that the number of digital collectible platforms in China has grown to over 500, a 5X increase from February 2022, when the total number of NFT platforms was just over 100. According to a report published by a local Chinese daily, the sharp rise in the number of NFT platforms comes amid the growing hype and popularity of the digital collectibles in the country. Major tech giants including Tencent and Alibaba have shown interest in the nascent space and have filed multiple trademark patents. The rise …
Nft / June 17, 2022
Chinese Communist Party warns of NFT hype bubble
According to local sources, the Chinese government has released a series of statements denouncing the value of the nonfungible token, or NFT, market, even though two of the nation’s major tech firms are pursuing the technology. The story was first released locally by the Securities Times — a news publication service acting as a spokesperson for the official Chinese Communist Party outlet People’s Daily — and reported by the South Morning China Post. The remarks claimed that “it is common sense that there is a huge bubble in NFT transactions,” and that most NFT buyers who acquire with a financial …
Blockchain / Sept. 10, 2021
China releases final anti-monopoly rules targeting major tech and payments firms
China has finalized new guidelines to aid in antitrust battle against tech giants. On Feb. 7, the State Administration for Market Regulation released finalized rules for its anti-monopoly push against e-commerce and payments giants like Alibaba, Ant Group and Tencent. The guidance specifically addresses "operators that provide business premises, transaction matching, information exchange and other Internet platform services." It builds on a host of recent efforts by both the SAMR and the People's Bank of China to rein in the broader tech industry, specifically targeting payments platforms as the country continues to push forward its own central bank digital currency. …
Regulation / Feb. 8, 2021
China’s Digital Yuan to Reportedly Target Dominance of Alibaba and Tencent
The People’s Bank of China is purportedly planning to use its digital currency electronic system (DCEP) — another moniker for its central bank digital currency — to target the dominance of technology giants like Alibaba and Tencent in the digital payments sector. The report comes only a few days after claims of the central bank prompting a top antitrust agency to launch a probe against Alipay and WeChat Pay for using their dominance to suppress competition. According to the Financial Times, even regulators and executives of Alibaba’s financial group Ant agreed that PBoC will target the market dominance of Alipay …
Regulation / Aug. 4, 2020
Tech's Antitrust Issues Flare Up on Both Sides of the New ‘Cold War,’ Report
Days after the CEOs of the world’s top tech firms faced antitrust hearings in the United States Congress, sources are alleging that Beijing too could soon probe its own digital monopolies. A Reuters report published on July 31 cites anonymous sources who claim the People’s Bank of China has formally recommended that the State Council’s antitrust committee launch a probe into the activities of digital payments titans Alipay and WeChat Pay. The central bank has allegedly argued that both have used their ascendant position to stifle any possible competition in the field of digital payments. If approved, an antitrust probe …
Regulation / July 31, 2020