By Brenda Collins
According to the latest news, China regulators received numerous complaints about suspicious and irregular activities related to Non-Fungible Tokens (NFTs) transactions. The report showed that the regulators recorded about a 30,000% surge in the rate of complaints tabled between 2021 and 2022. In 2021, about 198 complaints of NFTs’ suspicious activities were reported. Whereas in 2022, a whopping 59,700 complaints were made.
Furthermore, news revealed that most complaints rallied around refund issues, exorbitant transaction fees, failure to receive goods paid for, price manipulation, and others. The report was posted on Tuesday on the social media account of the State Administration for Market Regulation in China.
In addition, the report surfaced shortly before World Consumer Rights Day (WCRD), scheduled for March 15. The WCRD is a yearly program where the media and authorities in China file out cases of market manipulations. In last year’s edition, China’s watchdogs revealed numerous criminal activities and scams involving cryptocurrency.
China’s Harsh Crypto Stance Suffocates Crypto Firms
Meanwhile, China authorities still firmly maintain their harsh stance on crypto trading and transactions. However, as an act of boycotting the regulators, crypto enthusiasts use NFTs or digital collectibles for transactions. In addition, the State media and authorities constantly preach the adverse risks of using NFTs. However, companies and policymakers in China chose to explore the economic opportunities that digital assets provide.
Consequently, the domestic NFT market in the country is majorly self-regulated by the crypto industry. In addition, it forbids secondary trading even though an underground firm of NFT speculators continues to grow simultaneously.
Nonetheless, the NFT market in China has begun to feel the negative impacts of the restrictions regulators placed on it. According to reports, a famous tech giant in China, Tencent Holdings, recently revealed that it would close down its regulated NFT marketplace, Huanhe, by June. In preparation for the event, Huanhe started refunding users’ funds via its mobile app. Many other Chinese NFT platforms have been actively moving their brands to Hong Kong due to compliance issues.
The lack of a clear crypto regulation framework has caused a lot of misunderstandings between the crypto industry and regulators. Reports showed that the Chinese parliament members proposed a legal definition for NFTs and the crypto industry during the country’s Two Sessions government meeting held in March.
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