- WeChat and WhaleTalk are some of the firms that updated policies to restrict NFT platforms.
- By cutting off support for NFT platforms, the companies hope to avoid a regulatory crackdown.
- The firms ended support for NFT platforms to curb speculative trading, which is illegal in China.
Leading social media and internet firms in China have either restricted or discontinued support for non-fungible token (NFT) platforms. A report unveiled this news earlier today, noting that multiple companies have already updated their policies to effect the above changes. Reportedly, the firms are taking these measures due to the lack of clear regulations and fears of a government crackdown.
Tencent Holdings-owned social media giant WeChat is one of the platforms to enforce these changes. WeChat halted support for several NFT platforms that failed to adhere to its new guidelines. According to the report, Xihu No.1 and Dongyiyuandian are some of the projects that WeChat removed.
Apart from WeChat, WhaleTalk, a digital collectible platform that belongs to tech giant Ant Group, also updated its user agreement to raise the penalty for using an over-the-counter (OTC) desk to trade NFTs. Apart from issuing permanent bans, the platform plans to report users engaging in illegal activities to the police and hand them over to judicial authorities.
These measures seek to address problems in the Chinese NFT space. These include speculative trading and plug-in rush buying. While China has not necessarily outlawed NFTs, it prohibits any form of speculative trading associated with digital collectibles.
As for plug-in rush buying, the report elaborated that transaction demand for NFTs pushes some people to use scripts to complete large-scale rush purchases and hoard a massive number of NFTs to make profits. Notably, purchasing and using plug-in software for profits violates Chinese law.
Striving to remain compliant
With digital collectibles becoming increasingly popular, so have the vices that come with the burgeoning industry. As such, it is only typical of leading technology companies to take precautionary measures to remain compliant, especially when considering there aren’t clear NFT regulations.
The publication detailed,
Under the background that the compliance of digital collections is not clear, many platforms have begun to actively crackdown on violations to prevent further fermentation of related behaviors.
Meanwhile, Chinese companies are increasingly getting interested in the metaverse. A previous report disclosed that China Mobile Communications Association, an industry body that seeks to develop the country’s metaverse, expanded after onboarding new companies.
