WeChat – Chinese Internet Giants Remove NFT Platforms Fearing Gov’t Crackdown

WeChat deactivated many accounts for digital collectable platforms for breaking WeChat’s anti-illegal trade policy, while Ant Group and Tencent-owned NFT platforms revised their user agreements.

Because of a lack of regulatory clarity and a fear of government retaliation, China’s main social media platforms and internet behemoths have altered their policies to restrict or eliminate nonfungible token (NFT) platforms.

WeChat, the Chinese social media giant, is said to have terminated numerous digital collectible platform accounts due to rule infractions

Xihu No.1, a digital collection platform that was one of the market’s most heralded NFT initiatives, was one of the platforms that was eliminated. According to a local newspaper, another platform called Dongyiyuandian disclosed that its official app has been prohibited.

WhaleTalk, a digital collectible platform launched by tech giant Ant group, also updated its policy to increase the penalty for using an over-the-counter (OTC) desk for trading NFTs. It is important to note that even though NFTs are not necessarily banned, any form of speculative trading associated with the digital collectible derived tokens is still prohibited. An excerpt from the Google-translated report read:

“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.”

The rise in the number of illegal transactions and bot purchases associated with the NFT platforms has prompted several tech giants to take precautionary measures. During the blanket ban on crypto announced in September 2021, any firms found aiding crypto transactions or foreign crypto firms were held accountable. Thus, these firms’ recent actions and changes in user agreement policies seem to be done to avoid government crackdown.

While cryptocurrencies are illegal in mainland China, the Beijing government has indicated that it has no plans to outlaw NFTs. This was one of the main reasons why companies like Tencent and Alibaba filed a slew of new NFT patents in the last year. However, as digital collectibles have grown in popularity in China, they have become more vulnerable to price speculation and fraud.

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