The Chinese government has declared the theft of digital collections, including nonfungible tokens (NFTs), a criminal offense. This pivotal announcement on November 10 signifies a major leap in China’s legal approach toward the digital economy, particularly in recognizing the virtual property rights associated with digital collections such as NFTs.
China’s NFT legal landscape
The Chinese legal system’s latest interpretation categorizes NFTs as virtual property, leveraging blockchain technology to ensure their uniqueness and permanence. This classification comes despite China’s reluctance to open a secondary market for these digital assets. Nevertheless, consumers remain active on trading platforms, engaging in transactions like purchasing and transferring, highlighting NFTs’ inherent property value in the country.
The statement from the Chinese government categorizes digital collection theft under three perspectives, with the most comprehensive view recognizing these assets as both data and virtual property. Thus, theft involves not just the illegal procurement of digital collections but also the crime of illegally obtaining computer information system data, framing it as a dual-character offense.
This move comes against a backdrop of heightened interest in digital assets, even after China’s 2021 ban on most crypto-related activities. The ban, which largely curtailed cryptocurrency transactions except for ownership, did not suppress the intrigue surrounding digital assets, as evidenced by Alibaba’s Xianyu marketplace lifting its censorship on NFT-related keywords and the government-owned China Daily’s plan to develop an NFT platform.
China’s legal shift regarding NFTs is a significant marker in the global digital economy narrative. It underscores the importance of digital assets and sets a precedent for other countries. The decision to criminalize NFT theft could reverberate globally, influencing how digital assets are traded and secured worldwide.
Moreover, this development may prompt other nations to refine their legal frameworks concerning digital assets, potentially leading to more robust regulations. China’s influential role in the global economy suggests that its approach to digital asset protection might shape the future trajectory of the digital economy worldwide.
