The Supreme People’s Procuratorate of the People’s Republic of China, which has both investigation and prosecution authority in China, warned that NFTs have similar aspects with cryptocurrencies banned in the country.
The Supreme People’s Procuratorate of the People’s Republic of China has published a report on NFTs, recommending stronger risk investigation and assessment, and proper punishment for crimes.
After China restricted cryptocurrency trading in the country in 2021 and prevented banks from providing cryptocurrency-related services, the cryptocurrency industry in the country was almost wiped out. That changed when NFTs burst onto the scene and gained popularity in China as digital collectibles that don’t fall into the same basket as high-risk cryptocurrencies. However, the Supreme People’s Procuratorate of the People’s Republic of China noted this in its latest report:
Despite their high popularity, they are very likely to cause risks, especially legal risks, financial risks, management risks, and network security risks.
NFTs allow proof of ownership to be recorded on a Blockchain by attaching a unique digital identifier to virtual or real items. China’s top prosecutorial authority argues that property owners cannot hold ownership as defined, especially over digital artworks that can still be reproduced and distributed. “From a property rights perspective, consumers do not own the NFTs they purchase in the civil law sense, and consumers cannot prohibit others from accessing, copying or sharing the digital assets mapped by their NFTs. In fact, what consumers have is only an exclusive right to prohibit others from undermining the ownership of the NFT registered on the Blockchain.”
Although China has been reluctant to adopt cryptocurrencies, the country wants to utilize Blockchain technology, on which cryptocurrencies are based, to build its national digital infrastructure.
In the report published by the Supreme People’s Procuratorate of the People’s Republic of China, which points to NFTs as a new application of blockchain technology, it is seen that NFTs have a certain development potential.