WeChat, the most popular social media platform in China, changed its policy to prohibit all accounts from accessing crypto or non-fungible tokens (NFTs) related services. Under the new regulations, any entity that issues, trades, or deals with crypto or NFTs will be banned or restricted, and considered an “illegal enterprise.”
More on the NFT ban
A modified “Code of Conduct” section 3.24 mentions that virtual currency issuance, trading, or financing could have repercussions. Those accounts that are found to be violating the laws, may face certain restrictions or a permanent ban.
Among the changed rules are those relating to secondary trades of NFTs, which will also be governed by the new regulations. A Hong Kong-based crypto journalist, Wu Blockchain (Colin Wu), spotted the change and tweeted a screenshot.
Those accounts found to be in violation will be ordered to correct the issue within a certain timeframe. In addition, the new policy will restrict some of the account’s functions until the issue is addressed or the account is permanently banned, depending on the severity of the violation.
Accounts that have been banned, must show the platform a certificate of collaboration with a blockchain company. Moreover, the blockchain company should be registered with the Cyberspace Administration of China.
Chinese government’s attitude
The Chinese Cyberspace Administration has previously blocked a large number of accounts related to NFTs and cryptocurrencies. NFTs store records of assets like art, music, video, and in-game content. These are typically encrypted with the same underlying software as many other cryptographic products and are generally sold and purchased online. What many do not know though, is that NFTs do not actually act as the storage of these assets. Instead they are like passports that store general transaction data, improving traceability of the underlying pictures, music and the rest of it.
The government has strongly opposed virtual digital assets in China. The government has already criminalized the use of cryptocurrency trading and mining of it. Also, NFTs are subject to the same regulations.
In April, the Chinese financial and security sectors launched a campaign to reduce the risks associated with digital assets. In the future, it is estimated that the NFT market may become even more active, as well as that there may be hidden concerns, such as the possibility of money laundering.
Do NFTs have a future in China?
As of March this year, platforms like WeChat and WhaleTalk have distanced themselves from the technology due to a lack of legal clarity and concern about a Beijing crackdown. Non-fungible tokens (NFTs) appear to be growing in popularity, as China has more than 500 digital collecting platforms, a 5X increase from February 2022, when there were just over 100.
Right now, many reports indicate that the rapid rise in the number of NFT platforms is correlated with an increased interest towards the digital collectibles space.