China to take action against NFT market scammers

China to take action against NFT market scammers

Non- fungible tokens (NFTs) are the shining new development of this third phase of Internet development. China’s NFT industry has presented three major development statuses. Firstly, regarding the choice between public blockchains and consortium blockchain, the United States and some European countries use public blockchains, while China uses consortium blockchains. The information recorded in the public chain blocks European and American countries use can be viewed by anyone, they are decentralized and maintained collectively by all participants.

Secondly, NFTs are built on blockchain technology. Their core component is the hash. If this function is used on the same data, their hashes will be identical, validating that the data are unaltered, given that the user already knows the hash. Thirdly, regarding crypto-currencies, platforms in Europe and the United States deeply bind crypto currencies to public chains, with crypto currencies serving as the reward for maintaining public blockchains.

Recently, the Supreme People’s Procuratorate of the People’s Republic of China, the national agency responsible for legal prosecution, shared its thoughts on the Non Fungible token (NFT) market. In an article, three authors outlined the vision of the market risks and the reasons to combat them more actively. The article pays attention to the tendency of securitization of NFTs.

The article highlighted that, the disorderly development of the industry has a financial tendency and Inflated prices hide the “thunderstorm” crisis. There is no reasonable pricing mechanism and sufficient value support behind the inflated prices, and it is easy to deviate from the basic value law, leading to the accelerated formation of market bubbles.But interestingly it pointed out that hype can easily become a criminal tool.

Further it added that The legitimacy of the right source of the work itself is the decisive factor for the healthy and orderly development of digital works NFTs transactions. Prohibiting transactions in cryptocurrencies is an important guarantee for restoring the normal market price of digital works and resolving potential legal risks.

China has not changed its anti-crypto stance despite the steady progress of crypto adoption by Hong Kong. Moreover, the country seems to take the same hostile approach toward artificial intelligence.

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