NFT platforms in China have not been informed of the social media restrictions imposed on them.
China’s social media and networking platforms are starting to restrict NFT platform operations. They are concerned about losing operational permissions in the country if they allow NFT marketplaces to operate because the Chinese government is cracking down on all crypto-related activities. Non-fungible tokens (NFTs) are blockchain-based digital collectibles that are mostly sold in exchange for cryptocurrencies on online marketplaces. China has imposed several restrictions on the crypto sector in the last six months, making related activities illegal.
While there have been no official notices informing NFT platforms of the restrictions imposed on them, local media reports have mentioned the names of many NFT platforms that are no longer operational in China.
WeChat, China’s equivalent of WhatsApp, has removed popular NFT platforms from its search results. Platforms that have been banned include Xihu No.1 and Dongyiyuandian.
On March 16, Xihu No.1 reportedly contacted WeChat’s parent company Tencent, only to learn that the digital collection from Xihu No.1 now belongs to the WeChat applet’s unopened area.
Chinese social media giant WeChat reportedly removed several digital collectible platform accounts for violations of the rules. Digital collection platform Xihu No.1, one of the hyped NFT projects in the market, was among the removed platforms.
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Ant Group’s digital collection platform ‘WhaleTalk’ has also updated its user policies, making over-the-counter NFT transactions a punishable offense.
NFTs are critical in initiating the movement of crypto assets. According to market tracker DappRadar, sales of NFTs reached $25 billion (roughly Rs. 1,84,700 crore) in 2021 as the speculative crypto asset exploded in popularity.
China, on the other hand, is sticking to its rather conservative approach to the crypto sector, despite it gaining legal status in countries such as El Salvador and Dubai.
China has continued to crack down on various spheres of decentralized blockchain networks in the country after criminalizing crypto trading and mining in September 2021.
The country outlawed cryptocurrency-based fundraising in February.
China has never provided a list of reasons for its unusual stance on the crypto sector.
The country has been on the lookout for illegal crypto mining operations in order to shut them down and hold violators accountable.
Regions with a higher number of power outages are being scoured for crypto mining farms that may be hogging the power.