Chinese media continues to warn about NFTs amid the NFT boom

The People’s Daily - a Chinese State-run newspaper - argues NFTs, hinting at a possibility of fraud, with the recent price increase of digital art.
November 26, 2021 - Staff writer

Chinese Communist Party-controlled newspaper, The People’s Daily has again warned about the hype surrounding non-fungible tokens (NFTs), questioning whether it is another “zero-sum game hyped by cryptocurrency investors and capital.”

 

NFTs and the Metaverse have rapidly gained traction in China, with big brands adopting the technology. 

 

Recently, 36Kr Holdings, a media firm in China, distributed 1,124 metaverse-themed digital collectibles at a conference in Shenzhen. Tech companies like Tencent Holdings, Ant Group, were also noted to test their consumers’ perception of NFT collectibles. All of which is evidence of the increasing trend of digital collectibles across the nation.

 

NFT's popularity has remained despite the Chinese government’s move to ban cryptocurrency trading and mining activities earlier this year. NFTs are in a grey area, though, as neither it nor the metaverse is explicitly prohibited, leaving opportunities for businesses to exploit the technology.

 

As a result, the surrounding hype has caused some metaverse-based stocks to rise in value aggressively, alarming market regulators.

 

On November 25, The People’s Daily published an online article titled, “Is NFT leading to metaverse or fraud?” which inquired about the rising prices of NFTs, even addressing the sale of Beeple’s Everydays - The First 5000 Days, which sold for a record fee earlier in March, this year.

 

The article cited another example; Ant Group’s blockchain launched an NFT torch for the Asian Games in September. At the time of its launch, the digital torch was worth Chinese ¥39 (US$6.1), but private chat groups eventually fired up its value to over Chinese ¥10,000 (US$1,570.33).

 

“Amid the spree, NFT is deviating from its value and becoming alienated,” the article commented.

 

The People’s Daily article also cautioned that some cryptocurrency exchanges are conducting ICOs under the guise of NFTs. Initial Coin Offerings (ICOs) are one of the means cryptocurrency businesses use to raise capital.

 

Xiao Sa, a member of the China Banking Law Society, was quoted in the article; “Some domestic NFT platforms claim that they have licenses, which ‘are extremely difficult to obtain’ from provincial governments or even the State Council.”

 

This would not be the first warning of the Chinese government concerning NFTs, as back in September, the CCP warned about the NFT hype bubble popping.

 

So far, NFTs have managed to stay under the radar of the Chinese government, but things appear to be changing. 

 

Experts believe authorities would soon put tighter restrictions in place.

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