China’s WeChat bans crypto- and NFT-related accounts

by · July 4, 2022

China’s best social media platform, WeChat, has updated its policy to ban accounts that provide access to crypto- or non-fungible token-related services (NFT).

Under the new guidelines, accounts involved in the issuance, trading and financing of cryptocurrencies and NFTs will either be restricted or banned and will fall into the category of “illegal activities”.

The policy also covers secondary NFT trading, with the company noting that “accounts offering services or content related to the secondary transaction of digital collections should also be treated in accordance with this article.”

The move was highlighted by Hong Kong-based cryptocurrency news reporter Wu Blockchain (Colin Wu) on Monday, when he pointed out the significance of the action given that WeChat has more than 1.1 billion daily users in China.

With regard to penalties, the new policy states that “as soon as such breaches are detected, the public WeChat platform, according to the severity of the breaches, will order the infringing official accounts to rectify within a time limit and restrict certain features of the account. until the permanent account is banned. ”

The Chinese government rolled out a step-by-step ban on the local crypto sector between May and September last year. However, given the time of the latest policy update on WeChat, it may indicate that the platform has left some crypto activity unnoticed since then.

Furthermore, there is still a regulatory gray area in the country regarding NFTs as the assets can be purchased in fiat. Nevertheless, companies and platforms generally prevent secondary trading in order to avoid potential compliance issues when it comes to financing the technology.

In general, officials have not looked at NFTs, with the China Banking Association, China Internet Finance Association and the Securities Association of China issuing a joint statement in April warning the public of the “hidden risks” of investing in assets.

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Popular platforms such as WeChat and Ant group-owned WhaleTalk have been distancing themselves from the technology since March after they both began removing or restricting NFT platforms from their networks due to a lack of regulatory clarity and fears of a downturn from Beijing.

Despite this, a local media report from Thursday highlighted data showing that the number of digital collection platforms in China has grown to over 500, a fivefold increase since February 2022.