When the court had to confirm the NFTs’ legal characteristics, it stated that NFTs are “unique digital assets” that “belong to the category of virtual property.
Non-fungible tokens (NFTs) can now receive protection under the laws of China, according to a court in Hangzhou. The decision came after an incident where a group of token owners filed suit against a company that had attempted to sell them without permission.
On November 29th of this year, The Hangzhou Internet Court (a specialist internet court) published an article revealing that cryptocurrency blogger Wu Blockchain had shared it on December 5th. This report discusses the legal status of NFTs after China tightened regulations around crypto in 2021, leaving them in a gray area.
According to the Hangzhou Internet Court, digital collectibles are virtual property, while Non-Fungible tokens (NFT) collections can manifest features of property rights such as ownership, rarity, and marketability. The court authority also noted the following in its announcement.
The contract involved in the case does not violate the laws and regulations of our country, nor does it violate the actual policy and regulatory guidance to prevent economic and financial risks, and the law should protect it.
NFT Collections Belongs To Virtual Property Court Says
The court stated:
NFTs have the value of relevant intellectual property rights and condense the creator’s original expression of art.” NFTs are “unique digital assets produced on the blockchain based on the trust and consensus process between blockchain nodes.
The Hangzhou court decided that NFT collections fall under the heading of virtual property. Additionally, it stated that the transaction in question symbolizes the commercial activity of online sales of digital goods, making it a part of e-commerce activities and the subject of regulation as such under China’s E-commerce Law.
The issuing, trading, and mining of digital currencies like bitcoin were all subject to a broad crackdown last year by the Chinese government on matters relating to cryptocurrencies. Regulators worked to limit speculation while still enabling the issuance of NFTs. Instead of “non-fungible tokens,” they are frequently referred to as “digital collectibles” to avoid associations with the cryptocurrency world.
Fight Back Against NFTs That Violate Copyrights
Together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic, the National Copyright Administration of China (NCAC) recently began a campaign against copyright infringement and piracy on public domain networks.
Wechat, a well-known Chinese messaging service, is reportedly blocking accounts connected to NFTs, per reports from April of this year. Additionally, it was revealed in September that the National Copyright Administration of China (NCAC) had started a campaign to combat copyright theft and infringement through digital collectibles.
The agency stated in a press release on Friday that one of the main goals of the initiative is to improve copyright supervision of online businesses by looking into cases involving the sale and distribution of illegal goods on short-form video, live broadcast, and e-commerce platforms, and promptly dealing with illegal content.
The agency declared its intention to “severely crack down on the unauthorized use of other people’s works of art, music, animation, games, film, and television to create NFTs, make digital collections and sell pirated scripts through the Internet.