- The prosecution recommended “accurate” punishment for NFT-related crimes
- It claims there can be no real ownership of digital art; you can still copy and distribute it
The Supreme People's Procuratorate of the People's Republic of China, which is the country’s highest national authority for legal prosecution, warned that non-fungible token (NFT) collections have the same properties as virtual assets, which are prohibited in China, CoinDesk reported.
The leading crypto medium wrote that the authority published guidelines for the treatment of NFTs on May 15, recommending “accurate” punishment for crimes and better "risk research and judgment."
NFTs are gaining popularity in China
The Chinese government banned crypto trading and other crypto services in 2021, cutting off financial institutions from offering them. The industry all but disappeared as a result - until NFTs arrived. They started gaining popularity as "digital collectibles" in the country, but didn’t have the same standing as crypto in terms of risk - at least until now.
The prosecution stated in its new report:
While it has high popularity, it is very likely to cause financial risks, management risks, network security risks, etc., and especially legal risks. Prosecutors are paying close attention.
No real ownership
NFTs come with a unique digital identifier to real or virtual items that serves as evidence of ownership, which one can record on a blockchain. However, the Chinese prosecution claims there can be no real ownership, especially of digital art, because you can still copy and distribute it.
The report adds that from a property rights viewpoint, consumers don’t have actual ownership of any NFT assets they buy as per civil law. They cannot stop other people from accessing, copying or distributing these digital assets. They only have the exclusive right to stop other people from tampering with blockchain-recorded NFT ownership.
Ambiguous policies
Despite its aversion to crypto and approaches to ban it completely, China is trying to use the blockchain technology underlying digital assets to develop national infrastructure. The prosecution concedes that NFTs have development potential as a new application of blockchain technology.
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