May 17, 2023 14:52 UTC
May 17, 2023 at 14:52 UTC
Chinese law enforcement will take action against “pseudo-innovation” in the NFT market.
Marketing strategies like rewards and dynamic rights and interests, in the opinion of the public prosecutor, are easily transformable into unlawful pyramid schemes.
The People’s Republic of China’s Supreme People’s Procuratorate, the national body in charge of criminal prosecution, expressed its opinions on the non-fungible token (NFT) market on May 15. Three writers of a published study outlined the prosecutors’ perception of the market dangers and the following justifications for enforcing it more vigorously.
The essay focuses on the trend towards “securitization” of NFTs, or the shared ownership of one copy by numerous users, which, in the authors’ opinion, no longer adheres to the criteria of non-reproducibility, indivisibility, and uniqueness.
The “inflation of prices” on NFTs, brought on by marketing strategies like airdrops, blind boxes, and limited sales, is one threat that the prosecutors see, among others. The writers identify a lack of “artistic beauty” and a “reasonable pricing mechanism” as the reasons for the exorbitant prices of some non-fungibles, adopting the ambitious blend of aesthetic and economic study. Procuratorate claims that marketing strategies like rewards and dynamic rights and interests can quickly turn into nefarious pyramid schemes.
A “crackdown on criminal activities,” equal emphasis on governance and punishment, investment in risk research, and law popularization are all part of the suggested response to these dangers. According to the article, it would be the national prosecutors’ responsibility to distinguish between a “true innovation” and a “pseudo” one and protect the former one.
Despite Hong Kong’s continuous progress in adopting cryptocurrencies, China has not altered its anti-crypto attitude. Furthermore, the nation appears to view Artificial Intelligence (AI) with the same hostility. Early in May, a suspect was seized by local law enforcement and taken into custody in China’s Gansu region after reportedly using ChatGPT to create false news reports.
Although the NFT market “has some potential,” there are hazards associated with it in terms of money, security, and the law, according to Chinese prosecutors. As a result, the market requires both thorough control and a crackdown on “pseudo-innovation.”