China’s largest messaging app has banned a large number of accounts associated with non-fungible tokens (NFTs). WeChat clarified that NFTs are not entirely prohibited, but it doesn’t allow the secondary sale of digital collectibles as they are speculative in nature.
With 1.2 billion users, the Tencent-owned messaging platform is by far the biggest in China and among the world’s largest as well. But as a local financial news outlet revealed, WeChat isn’t a big fan of NFTs, which have taken the world by storm, with this nascent market hitting $41 billion last year and almost matching the market for fine art.
Sina reported that WeChat had suspended dozens of accounts that widely promoted non-fungible tokens. According to Chinese digital currency journalist Colin Wu, the company requires such accounts to “have a blockchain company filing provided by the Chinese government, and disallowed secondary transactions.”
WeChat, which has 1.2 billion users, said it had banned NFT accounts in large numbers, required them to have a blockchain company filing provided by the Chinese government, and disallowed secondary transactions. https://t.co/sr828ipZaV
— Wu Blockchain (@WuBlockchain) March 30, 2022
China doesn’t currently have any regulations on NFTs. However, it has banned digital currencies in their entirety as well as ICOs and block reward mining. This leaves Chinese NFT fans with the sole option of purchasing digital collectibles through the yuan. The government also has a few restrictions on the blockchain networks on which NFTs can be minted, favoring those that the government has been able to have a heavy influence in developing.
On Weibo, China’s version of Twitter which has close to 600 million users, WeChat clarified its position, saying it had recently “standardised and rectified public accounts and small programmes for speculation and secondary sales of digital collections.”
It added that this was done “according to relevant national regulations, in order to prevent the risk of speculation in virtual currency transactions.”
Tencent, the parent company, declined to answer media questions on the suspensions. The gaming, entertainment, and social media company has ventured into NFTs with an initiative it led alongside Ant Group, becoming the world’s first UN-approved standards project on digital tokens.
Some of the suspended accounts, including one named Spirit Leap, told the South China Morning Post that they were suspended after being reported by other accounts. On WeChat, these accounts are no longer available on search results. Existing subscribers who access them are greeted with a line stating, “This account has no legal permit or licence to publish, disseminate, or engage in related business activities.”
As WeChat further stated, public accounts can only display the initial sale of a digital collectible. Further, operators must provide proof of cooperation “with a blockchain company that has been recognised by the Cyberspace Administration of China.”
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