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Wechat to Prohibit Accounts From Providing Some NFT and Crypto Services

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According to a press release, Wechat Tencent intends to impose penalties on public accounts facilitating NFT secondary trading. Accounts offering transaction channels and cryptocurrency recommendations are also subject to the new rule.

Popular Chinese app imposes restrictions on NFT trading

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Wechat, the instant messaging, social media and mobile payment app developed by Chinese tech giant Tencent, is introducing a policy update that prohibits certain services related to non-fungible tokens (NFTs) and cryptocurrencies on its platform.

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According to the South China Morning Post (SCMP), Tencent said it will “order accounts to be corrected if they provide relevant services or content for secondary trading of digital collectibles, and will restrict some features or even ban the account.” The news comes after Wechat admitted in April that it had suspended some NFT-related accounts.

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The policy update will also introduce penalties for accounts providing transaction channels, recommendations, or issuing cryptocurrencies to Wechat users. Accounts supporting initial coin offerings (ICO) and crypto derivatives transactions will also be affected.

The report notes that with this move, Wechat’s leadership is taking into account guidelines issued by Chinese regulators earlier this year suggesting that businesses in the industry should avoid the financial aspect of such digital assets.

According to Wang Yining, a Shanghai-based lawyer who specializes in blockchain and Web3 cases, “the focus of the new rule is on the narrative that the secondary market of digital collectibles can cause speculation and financial market instability.”

Wechat said it is being proactive

The lawyer was referring to a joint statement issued by the National Internet Finance Association of China, the China Banking Association and the China Securities Association in April aimed at limiting the risks associated with cryptocurrencies.

“Tencent is acting proactively to avoid trouble,” said Bao Linghao, senior analyst at market research firm Trivium China. He pointed out that there are currently no official rules for NFT trading yet, but emphasized that “Chinese regulators do not like speculation of any kind, including NFTs.”

This spring, Chinese financial institutions were asked to stay away from NFTs, and their use in a number of areas, including securities, insurance, loans and precious metals, was banned. Experts believe that the PRC is likely to create a centralized platform for the secondary trading of NFTs.

Chinese digital collectibles are built on consortium blockchains rather than open blockchains like Ethereum. In addition, guidelines issued in April suggested that they should be purchased using Chinese yuan under real names to avoid money laundering risks.

SCMP also cited Wechat stating that accounts that display digital collectibles and primary transactions must have contracts with China Cyberspace Authority (CAC)-certified blockchain companies and refrain from supporting secondary trading.

Blockchains built by big tech firms like Alibaba Group Holding, Tencent, Baidu and were among the first to be approved by the CAC in 2019, the paper notes, adding that consumer brands and Chinese state media have jumped on them since last year. . tripod NFT with collectibles based on such platforms.

What is the future of NFTs in China and what do you think of the new Wechat restrictions? Share your thoughts on this subject in the comments section below.

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