Tech

Chinese NFT platforms no longer want you to trade NFTs

However, there has always been a sense of uncertainty in the industry: as with all young technological creations that do not fit into traditional regulatory frameworks, the countdown to the moment when the Chinese government intervenes has begun early. Since 2017, China has maintained a tough stance against crypto that is unparalleled worldwide. Chinese financial and cyber regulators have yet to outright ban NFT trading, but the silence is clouding the business.

This new joint statement is not an official government statement, but it is close. “While the pledge letter has no legal effect, it does bind the members of the three associations to some extent,” said JC, a Shanghai lawyer for Chinese law firm Zhong Lun.

While the state is silently contemplating its move, NFT industry players are trying to stay safe.

For example, NFT platforms owned by well-known Chinese technology companies do not use the term “NFT” anywhere. Instead, they call them “digital collectibles”. The idea is that they are not much different from your Funko Pop toys or vinyl collections, except that they are online, on blockchains owned by a private company that are not completely transparent to the public. Collectors must buy them with state currency, and resale is prohibited.

Alibaba, for example, released its Jingtan NFT app in December and is now releasing NFTs as often as every day. These limited-edition offerings—typically 10,000 copies of famous Chinese art or digital artists—sell for $5 or less. Shoppers may have to click in milliseconds to secure a purchase, but it doesn’t come at a cost. And once they purchase it, they need to wait six months before “gifting” the item to another user, who needs to wait another two years before gifting it again. Last year, Alibaba banned its own used goods marketplace from listing any NFT products. Because of these rules, NFTs do not have an official resale value, so they will not work as financial investments.


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