The Supreme People’s Procuratorate of China recently expressed concerns about the nonfungible token (NFT) market. In an article authored by three individuals, the agency outlined the risks associated with NFTs and emphasized the need for proactive measures to address them.
One area of concern highlighted in the article is the “securitization” of NFTs, where one copy is shared among multiple users. The authors argue that this practice contradicts the fundamental principles of non-reproducibility, indivisibility, and uniqueness that define NFTs.
The prosecutors also raised alarms about the “inflation of prices” in the NFT market, which can be fueled by marketing tactics like airdrops, blind boxes, and limited sales. They criticized the inflated prices of certain nonfungibles, questioning the presence of “artistic beauty” and a “reasonable pricing mechanism” behind them.
Additionally, the agency expressed concerns that marketing models involving rewards, dynamic rights, and interests could potentially transform into illegal pyramid schemes if not regulated properly.
Overall, the article reflects the prosecutors’ perspective on the NFT market, highlighting their concerns about securitization, price inflation, and potential illicit activities. It suggests a need for increased oversight and regulation in the NFT space.
China has not changed its anti-crypto stance despite the steady progress of crypto adoption by Hong Kong. Moreover, the country seems to take the same hostile approach toward artificial intelligence. In early May, a suspect was detained by local authorities and arrested in the Gansu district of China after allegedly using ChatGPT to generate fake news stories.
Related: China issues first arrest over fake news created with ChatGPT
While the NFT market “has certain potential,” it bears financial, security and “legal” risks, Chinese prosecutors believe
