Beijing Regulator warns about NFT
The Beijing Municipal Administration for Market Regulation has warned investors to be on the lookout for unlawful fundraising operations using NFTs, which contain speculative characteristics and are considerable risk. Despite China's planned prohibition on cryptocurrency transactions in 2021, numerous sites still provide NFT trading services.
According to the Beijing Municipal Administration for Market Regulation, many of these initiatives enticed investors with the notion of "metaverse investing" or NFTs, which contain speculative aspects and are high risk.
NFT Trading arise in China
NFTs, often known as "digital collectibles," are gaining popularity in China. Despite the fact that China outlawed cryptocurrency transactions in 2021, it has yet to establish clear and fast laws for NFTs. This hasn't prevented Chinese customers from purchasing and selling what are known as "digital collectibles," and various sites provide such services.
For example, Xiaohongshu, or "Little Red Book," a famous social media network dubbed the "Chinese Instagram," has created an NFT area named "R-Space," thanks to a recent cooperation with layer-1 public blockchain Conflux Network.
Yifan He, CEO of Red Date Technology, the developer of the state-backed blockchain infrastructure Blockchain-based Service Network, told Forkast last month that Chinese regulators are particularly strict about businesses that use so-called unauthorized capital pools, and Chinese NFT trading platforms use capital pools to process transactions.
Tighten Securities for Digital Collectibles
Because of the concerns of fraud, money laundering, and unlawful fundraising, the province of Hainan has vowed to strengthen its regulation of digital collectibles. This comes after the arrest in October of eight people in eastern Henan province for conducting internet frauds using digital collectibles, causing the theft of over 2.65 million yuan.
The Beijing Municipal Administration for Market Regulation has cautioned investors to be cautious of the hype and speculation around NFT investments. With the expansion of NFT trading in China and rigorous restrictions for NFT enterprises, it is critical for investors to understand the dangers of these investments.
“Stay alert for new patterns of illegal fundraising activities, and resist being influenced by hype and speculation,” the authority said.
To speak to a professional on Cryptocurrency, contact KXCO.IO.
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