Chinese NFT platforms no longer want you to trade NFTs

However, there has always been a sense of uncertainty in the industry: as with all young tech creations that don’t fit into traditional regulatory frameworks, the countdown has started early for Chinese government intervention. Since 2017, China has maintained a tough stance against crypto unprecedented in the world. Chinese financial and cyber regulators have yet to outright ban NFT trading, but the silence casts a shadow over the company.

This new joint statement is not an official government statement, but it comes close. “Although the letter of engagement has no legal effect, it is somewhat binding on the members of these three associations,” said Jay Si, a Shanghai-based attorney at Chinese law firm Zhong Lun.

As the state silently contemplates its decision, NFT industry players are trying to remain cautious.

For example, NFT platforms owned by major Chinese tech companies do not use the term “NFT” anywhere. Instead, they call them “digital collectibles.” The idea is that they’re not much different from your Funko Pop toys or vinyl collections, except that they’re online, on privately owned blockchains that aren’t fully transparent to the public. Collectors must purchase them with government-issued currency and resale is not permitted.

Alibaba, for example, launched its NFT app Jingtan in December and now posts NFTs as often as daily. These limited-edition offerings — typically 10,000 copies of renowned Chinese artworks or works by digital native artists — are priced as low as $5. Buyers may have to click through in milliseconds to secure the purchase, but it doesn’t cost much. And once they own it, they have to wait six months before “giving” the item to another user, who has to wait another two years before giving it away again. Last year, Alibaba banned its own second-hand marketplace from listing NFT products. Due to these rules, NFTs have no official resale value, so they will not work as a financial investment.