China might be making small progress in legalizing NFTs as a court in Hangzhou city ruled out that non-fungible tokens have the traits of asset property in a dispute case between a user and a platform.
The country’s tech giants have been trying to receive regulatory approval to sell NFTs on marketplaces but the authorities have continuously denied the requests.
Recently, Tencent and QQ shut down their NFT options and collection. In fact, to escape the strict legislation against cryptocurrencies, which are closely associated with Web3 and NFTs, the companies use the word “digital collectibles.”
So, when a case of an NFT dispute went to the Hangzhou Internal Court, there started a debate about whether digital collectibles are authentically mentioned in the law or not. A user had sued an NFT platform for canceling an NFT sale without his consent. The platform defended itself by saying the individual didn’t provide accurate personal information that violated its KYC procedures.
The judge heard both parties and declared digital collectibles as property protected by the laws of China because they hold value, ownership, and can be traded virtually. The collections are built on a trust and consensus model on the blockchain and also protect the intellectual rights of both creator and owner.
Since the transactions take place through the internet, the court ruled out that the NFTs should come under China’s “E-commerce Law.”
This case holds much importance to the Chinese NFT community and companies because now they can regulate or alter their work based on the existing law.
