China’s NFT collections should be protected by property laws: Chinese Court December 5, 2022
China’s NFT collections should be protected by property laws: Chinese Court <br><br>
China’s NFT collections should be protected by property laws: Chinese Court
A court in the city of China, Hangzhou court of the Internet, claimed that NFT collections are online virtual property and should be protected under Chinese law “as the object of transactions between the two parties”.
As the country began to take serious action on cryptocurrencies in 2021 while not giving much significance to NFTs, on Nov 29, an article posted by Hangzhou, a specialist internet court, revealed the favorable language for NFTs.
The article explains that NFTs “have the object characteristics of property rights such as value, scarcity, controllability, and traceability” and “belong to network virtual property” that “should be protected by the laws of our country.”
The court also mentioned the importance of “confirming the legal attributes of the NFT digital collection” for a case and claimed that “Chinese laws currently do not clearly stipulate” the “legal attributes of NFT digital collections.”
A case was presented forward by the court, in which an unnamed user of a technology platform sued the company for not completing an NFT sale and canceling their purchase from a “ flash sale” this happened because the user’s personal details were not available with the company, the username and phone number that reportedly didn’t match.
The court further informed “NFTs condense the creator’s original expression of art and have the value of related intellectual property rights.” Moreover, NFTs are “unique digital assets formed on the blockchain based on the trust and consensus mechanism between blockchain nodes.”
Because of the case that came into the limelight, the court decided that “NFT digital collections belong to the category of virtual property.” Whereas, the case’s transaction will be considered as the “selling of digital goods through [the] internet” that is similar to any e-commerce transaction and will be “regulated by the ‘E-commerce Law.’”
In the month of May 2022, Shanghai High People’s Court released a white paper stating that despite the country’s ban on crypto, anyone holding Bitcoin is subject to property rights laws and regulations.
After the government decided to ban crypto, they took the initiative with a government-backed blockchain project to separate crypto from NFTs. Here, one can purchase non-crypto NFTs with the help of fiat money.
Already, in the month of April 2022, the Government of China had explained to the citizens the “hidden risks” of investing in non-fungible tokens in a joint statement between the China Internet Finance Association, the Securities Association of China, and the China Banking Association. The Chinese Government has remained vigilant and tried to warn its population.
The Singaporean High Court judge has also previously linked NFTs to physical items such as fine wine and luxury watches; they said, “NFTs have emerged as a highly sought-after collectors’ item.”