The Chinese court in Hangzhou calls for NFT regulation
China’s Hangzhou court argued that NFTs have properties of property rights such as value, scarcity, disposability and legibility, and therefore should be protected by law.
The Hangzhou Internet Court is a court with special jurisdiction that focuses on Internet-related matters. The Court dealt with a case at the end of November in which it called for NFT regulations.
The Hangzhou Hearing
Hangzhou Digital Technology Company, which operates an NFT marketplace and a platform user, was on either side of the hearing.
The user claimed that it did not receive the NFT it purchased, even after fulfilling all the requirements. The user claimed that the company refunded them instead of delivering the purchased NFT.
The user claimed that the company caused him financial harm by withholding from his end of the trade and sued to request to either deliver the NFT or compensate his financial loss by paying 99,999 yuan ($14,368).
In response, the company claimed that it did not facilitate the transfer because the information the user provided during the purchase was incorrect.
The Hangzhou Internet Court sided with the user because the transaction involved digital NFT collections, not NFT rights certificates. The court stated:
“NFT digital collections have the object properties of property rights such as value, scarcity, disposability and tradability. They also have the unique properties of virtual network property such as network virtuality and technology, and are virtual network property.
The contract involved does not violate the laws and regulations of our country, nor does it violate our country’s realistic policy and regulatory orientation to prevent economic and financial risks, and should be protected by our laws.”
China on crypto
China has been known for its anti-crypto stance. The country banned crypto mining in 2021, and many crypto leaders have fled due to its strict regulations.
However, crypto enthusiasts have been pushing for change. In October, China-backed researchers called for the launch of a pan-Asian digital currency to compete with the US dollar’s dominance in the region. In November, it was revealed that China still holds all of the krypton it confiscated, the total amount equivalent to $3.9 billion.
Looking at the signs, BitMex CEO Arthur Hayes speculated that China may use Hong Kong’s crypto-embracing attitude to capitalize on crypto.
