On Friday, China’s copyright authority announced that it would increase oversight of infringement issues involving non-fungible tokens (NFTs). Some investors try to capitalize on the trend despite increased regulatory scrutiny and waning public interest.
The National Copyright Administration to crack down on NFT copyright infringement
The National Copyright Administration (NCA) said it would strictly prosecute violations such as minting NFTs or digital collectibles based on other people’s work without permission. According to the NCA, such work may include art, cartoons, music, video games, films, and television shows.
The move is part of a two-month campaign launched by the NCA, the Ministry of Industry and Information Technology, the Public Security Bureau, and the Chinese Cyberspace Administration to combat copyright infringement.
According to the NCA, the initiative also addresses copyright issues in other fields, such as short videos and online literature.
NFTs drew widespread attention in China after breaking into the global mainstream last year. In the country, virtual assets are frequently referred to as digital collectibles to avoid any perceived association with cryptocurrencies, which have been officially banned from trading since last year following a long-standing crackdown.
China’s platforms usually price their digital collectibles in yuan rather than crypto
Most Chinese platforms price digital collectibles in yuan rather than cryptocurrencies to appease authorities who have warned of speculative risks in the NFT market. Secondary trading is widely prohibited as well.
Nonetheless, some Chinese buyers have successfully traded digital collectibles outside official platforms. Scams, thefts, and copyright infringement are all common problems in the largely unregulated global NFT market, and they are also prevalent in China.
Earlier this year, a court in the eastern Chinese city of Hangzhou issued the country’s first landmark decision on an NFT copyrights case. The court ruled that the marketplace NFTCN should be held liable for facilitating the sale of a cartoon image without the creator’s permission, which violated the artwork owner’s “right to disseminate works through information networks.”
Many Chinese firms have already reduced their NFT operations as regulatory uncertainty grows and public interest faded after the initial frenzy last year. Tencent Holdings announced last month that its NFT platform Huanhe would cease issuing digital collectibles to the public to “focus on its core strategy.”
However, enthusiasts are still active in the space. According to Chinese media reports, some “digital mooncakes” were selling for more than 10,000 yuan (US$11,300) ahead of this year’s Mid-Autumn Festival.