China’s Hainan to Police NFT Market to Prevent Chaos

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  • China’s Hainan province has indicated plans to heavily scrutinize the NFT market to weed out unethical behaviors
  • Hainan’s authorities want to prevent NFT-based money laundering and copyright infringement
  • The province’s authorities want to forge a healthy digital collectibles market to attract foreign investments

China’s Hainan has revealed plans to heavily scrutinize the province’s NFT market to prevent malicious actors from exploiting digital collectibles to launder money, infringe copyrights and hype NFTs for personal gains. The province’s authorities want to use the extra grip to forge a healthy collectibles market that can appeal to foreign investors. Some of the measures targeted to bring calmness to the market include public education on NFTs and their risks.

No NFT-based Pyramid Schemes

In an announcement on January 29, Hainan’s authorities said they intend to “attach great importance to and improve the sense of responsibility and urgency in the supervision of digital collectibles,” adding that NFTs have wide use cases.

They also pointed out that concerned agencies will work together to bring calmness to a market that can easily become chaotic. According to the authorities, NFTs can be used to facilitate illegal fundraising and pyramid schemes among other fraudulent activities.

The authorities plan to ensure a healthy NFT market by monitoring and preventing copyright infringement and misinformation by working with websites and other online platforms.

Education to Purity the NFT Market

Hainan also intends to educate the general public on the risks of investing in digital collectibles and the laws governing the NFT market as another way to “effectively purify the digital collections market.” The crackdown will include NFT marketplaces to expose criminals who may hide behind things like “whitelist, regular purchase and cash rewards” to conduct criminal activities.

Hainan’s plans align with the country’s recent revelations that it’s planning to launch a regulated NFT marketplace to oversee digital collectibles trading on the secondary market, an indication that China is warming up to NFTs despite its tough stand on cryptocurrency mining and trading.