Internet giants in China remove NFT platforms fearing government crackdown

China is known for its massive crackdown on digital assets. The country’s leading internet giants and social media platforms have updated their policies to limit or ban NFT platforms, citing the absence of a clear regulatory framework and fearing the government’s strict actions.

As per the reports, China’s social media giant WeChat removed multiple digital collectible platform accounts, including hyped NFT project Xihu No.1, for violating rules. Dongyiyuandian, another major platform, also revealed that its official application has been banned.

The digital collectible platform WhaleTalk, which is backed by tech giant Ant Group, has also updated its policy by mentioning an increase in penalty for using an over-the-counter (OTC) desk for NFT trading. 

NFTs “not” banned

Notably, despite NFTs not specifically banned, any type of speculative trading associated with them is still prohibited. Here is what report reads:

“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.”

Last year, China pressured state-owned enterprises to halt any kind of Bitcoin mining activities in the country.

The growth in illicit transactions and bot purchases linked to NFT platforms has led numerous internet giants to take preventive measures. Any firms discovered assisting crypto transactions or foreign crypto corporations were held liable under the blanket ban on crypto issued in September 2021. As a result, these companies’ recent actions and revisions in user agreement regulations appear to be motivated by a requirement to avoid government retaliation.

China and its powerful actions 

While crypto is 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, which prohibited crypto mining tools after the Chinese crackdown, 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.

In November as TheCoinRise reported, China planned to introduce a national Blockchain standard this year.