NFTs Targeted in Risk Notice Issued by Chinese Regulators -Breaking
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© Reuters NFTs Targeted in Risk Notice Issued by Chinese Regulators- Three Chinese financial and trade associations have issued a joint statement warning the public of the “hidden risks” of non-fungible token (NFT) investing in a Wednesday notice.
- China Internet Finance Associations, China Banking Association, and China Securities Association are all trying to encourage innovation in Web3 spaces.
- China Banking Association stated that NFT assets should be classified differently from precious metals and securities.
Three Chinese financial and trade associations have issued a joint statement warning the public of the “hidden risks” of non-fungible token (NFT) investing in a Wednesday notice.
China Internet Finance Associations, China Banking Association and China Securities Association launched initiatives to encourage innovation in blockchain and cryptocurrency.
The various initiatives also focus on “resolutely curb[ing] the tendency to NFT financialization and securitization”. NFT-focused efforts are intended to lower the threat that NFTs will be used for illicit purposes.
China Banking Association further stated that NFT assets shouldn’t be classified in the same manner as securities and precious metals by member banks.
Also, cryptocurrencies like Ether (ETH), UST (and BTC) cannot be used to settle or price NFT transactions. NFT platforms that offer services need to authenticate real names and comply with Anti-Money Laundering laws.
Last but not least, compliance-compliant companies and associations cannot invest in NFTs nor financially support those who do so.
There are other measures in the proposed code of conduct which include banning centralized service providers from providing centralized NFT transactions, and restricting any activities that could weaken the tokens’ non-fungibility.
In anticipation of government action, Chinese social media platforms like WeChat have taken down any videos or advertisements relating to NFT platforms.
But not all Chinese-based businesses have done so. Alibaba The NFT Marketplace was launched by the Group (NYSE:) Group in August 2021. It allows customers to buy tokens that represent licenses for copyrights.
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