- Prosecutors in China have recommended harsh punishment for NFT crimes, likening virtual collectibles to cryptocurrencies
- The prosecutors hold that the popularity of NFTs in the country doesn’t mean that collectibles are immune to financial, security and legal risks
- They however believe that NFTs can be used to advance blockchain use cases
Prosecutors in China have recommended harsh punishment for NFT crimes, likening virtual collectibles to cryptocurrencies. Through China’s national legal prosecution agency, The Supreme Procuratorate of the People’s Republic of China, the prosecutors believe that the popularity of NFTs in the country doesn’t make virtual collectibles immune to financial, security and legal risks. However, they believe that digital collectibles can be used to advance blockchain use cases in the country.
NFT Holders can’t Control Access to their Holdings
According to the prosecution agency, NFTs are somewhat similar to cryptocurrencies that the country banned two years ago, which calls for heightened scrutiny in the space and malicious actors punished “accurately.”
The prosecutors observed that NFTs pose ownership controversy when subjected to the country’s civil law and when viewed through the property rights lens. According to them, an NFT collector only has control over the ownership of their virtual artworks but can’t control access and distribution of their holdings.
Apart from the ownership dilemma, the prosecutors are also not happy with how NFT prices are determined, noting that it opens the door to malicious price manipulation and the birth of illegal pyramid schemes.
China Hates Crypto but Loves the Technology
The prosecutors disclosed that they’ll mount an operation to differentiate between quality NFT projects and imitations riding on the popularity of the former.
Despite China’s banning crypto activities, it has embraced blockchain technology and recently announced a national blockchain center that will train 500,000 professionals on the technology. The country has also announced plans to create a regulated NFT marketplace.
With the Chinese prosecutors hinting at a possible crash between NFTs and the law, it’s yet not clear whether this is a cue of an impending NFT ban in China.
