“By 2022, China saw NFT complaints surge by 300X”, says SAMR
- According to the SAMR report, NFT-related complaints reached a record high in 2022.
- The regulator also faced an increase in complaints from various other sectors.
Consumer complaints in China regarding NFTs were triggered 300 times in 2020, revealing a larger problem that cannot be resolved. It has become increasingly difficult to tackle the problem, according to the Norwegian State Administration for Market Regulation (SAMR), the country’s crypto market regulator.
NFT-related complaints in China
Non-Fungible Tokens (NFTs) complaints filed via SAMR reached 59,700 in 2022, of which only 128 recorded cases existed in 2021. This can also be attributed to the time when Chinese firms were still roaming around testing the digital collectibles markets. Complaints cover areas such as refund refusals, extra fees and price manipulation.
In mainland China, most NFTs are referred to as digital collectibles and can only be purchased via legal tender, as Beijing had already banned cryptocurrencies. According to SAMR, the root cause was the still evolving business model. This scenario makes it cumbersome for the authorities to impose any regulations.
The national government of China has been constantly controlling and suppressing blockchain-based assets for years, as they believe it is a threat to their financial stability. This forced industry leaders to withdraw from the highly regulated sector. For example, last summer Tencent Holdings declared the closure of its NFT platform Juane. They closed the sale last year, and the business was due to close in June 2023.
Global Terms and NFTs
The NFT world suffered globally due to recent events and market uncertainty. The FTX saga from November 2022 dragged prices down. The recent shutdown of Silicon Valley Bank and Signature bank also greatly affected their prices. One possible reason for the effect was that major NFT players had assets in SVB, including Yuda Labs, creator of Bored Ape Yacht Club.
Beijing remains committed to developing blockchain technology, especially after President Xi Jinping favored the technology back in 2019. In January 2023, China launched a fully regulated digital asset trading platform to facilitate transactions of NFTs and certain intellectual properties.
China and complaints
Although these complaint numbers appear to be large, they represent only a small percentage of the total of 13 million cases received by SAMR in 2022. Many other sectors, such as internet and technology businesses, including cross-border e-commerce, were targeted 34,500 times . These complaints accounted for 42.6% of last year. Most were about counterfeit products, and sellers failed to fulfill their warranty obligations.
There were also complaints about e-commerce live streaming, a popular business model that allows people to watch live videos and shop for their favorite items at the same time. Complaints in this exciting sector rose 115% to a whopping 220,900 complaints. Most involved poor quality products and false advertising.
The new energy car sector could not be free of complaints; according to SAMR, they received 16,000 complaints, a 62.8% increase in comparison. Most of them involved contracts and quality problems with the vehicles, such as engine rattles, battery damage and sudden stops.
Every consumer industry is bound to have some consumer-related issues. These highlight the weak points in the products and services. Surely there must be an authority that people can go to in order to settle. But so many complaints from one sector create a cause for concern that needs to be addressed quickly.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional money exchange systems. She is also fascinated by the blockchain technology and its function.
