On November 10th, China released a statement declaring that anyone caught stealing non-fungible tokens or other digital assets can be punished under the law.
Three types of crimes are outlined in the statement. The first two classify NFTs as either digital property or data. The third view of the crime declares digital assets can be both digital property and data, which could result in two crimes, or “co-offending.” All three classifications would be subject to criminal processing under theft sentences in the country.
Because stealing NFTs or digital collections requires intrusion into the computer network on which it is stored, thieves are also guilty of obtaining computer information system data illegally. The document calls digital NFT collections “network virtual property,” and states that in the context of the law, NFTs “should be recognized as property.”
China specifically mentions non-fungible tokens in the statement, outlining characteristics such as uniqueness, immutability, and their ability to be stored permanently. The document mentions that while the country hasn’t opened its “secondary flow markets” for NFTs, citizens can still use trading platforms to make purchases of NFTs.
The move from the Chinese governments marks a shift in the country’s view on non-fungible tokens. In 2021, China had a ban on nearly all things related to cryptocurrency. Since then, as world adoption of Web3 appears more and more inevitable, China has begun to soften its stance on nascent technologies.
China Tiptoes into the NFT Space
The communist country with the second largest economy in the world isn’t exactly bullish on NFTs and crypto, and every move it makes in the space is cautious and measured. But in recent months it appears the country is taking steps to adopt NFTs and crypto. Here are some recent articles about China in Web3.
First, about two months ago, China made Web3 news when it approved NFT and metaverse trademarks. The trademarks were for downloadable digital files that can be authenticated by NFTs, the use of virtual goods for entertainment, virtual goods for retails purposes, and providing animated characters to use in digital environments.
Next, three months ago, a report from Politico revealed China Mobile was proposing bringing its social credit system into online virtual worlds. The system, which is controversial at best, assesses citizen’s “trustworthiness” via various metrics. Now it appears China could bring it into the metaverse.
Lastly, nine months ago, China’s version of Instagram, Little Red Book, integrated the Conflux blockchain into its network. The integration allows users to display Conflux-minted NFTS on their profile page.
Yesterday’s statement outlining the rights and classifications of digital assets shows China is willing to enforce legal action against those who steal digital assets to protect NFT holders. It may still be early, but the move hints that China could be bullish on NFTs in the future. We’ll be on the lookout for any updates to the story.