While the context of the NFT market is still quite active in China despite many barriers from the government, the Fujian Provincial Financial Supervisory and Regulatory Authority have sent out a warning to ‘clean up’ NFT exchanges.
Last weekend, the Fujian Provincial Financial Supervisory and Regulatory Authority sent a reminder letter to NFT suppliers. Because the community in China is still very interested in NFT trading despite many warnings. The provincial authorities also confirmed the above document with domestic reporters.
The reminder letter as soon as it was released became a hot topic of discussion on social networks. The content of the document, the financial regulator and supervisory agency will clean up and rectify the NFT transaction venues.
The reason defended for tough legal action is because “NFT is easily involved in illegal activities such as fraud, speculation, money laundering after financialization and causes multi-layered risks”. At the same time, the Fujian regulator will not participate in, endorse or approve any local NFT exchanges.
However, platforms that use NFTs regulated in China are not trading venues. Therefore, Fujian will manage this activity according to the regulation ‘7+4’ issued on December 31, 2021. In it, ‘7+4’ is used to describe professional financial institutions or non-governmental local.
According to data from DappRader, OpenSea’s transaction volume has surpassed $30 billion. This has made OpenSea the world’s largest NFT marketplace by trading volume.
However, the NFT space has many potential risks that make it limited in China. On April 13, 2022, the domestic regulation of NFTs was approved by the China Internet Finance Association; China Bankers Association, and China Securities Association issued. After that, the Chinese government regularly released documents asking to stop NFT trading.
On the other hand, government-issued NFTs are publicly accepted. Typical Chinese state media Xinhua released 110,000 NFT for free. Or the Beijing 2022 Olympic Games launch the NFT video game “Olympic Games Jam”.
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