On May 15, the Supreme People\u2019s Procuratorate of the People\u2019s Republic of China, the national agency responsible for legal prosecution, shared its thoughts on the non-fungible token (NFT) market. In an article published, three authors laid out the prosecutors\u2019 vision of the market risks and the following reasons to enforce it more actively. <\/p>\n
The article pays attention to the tendency of \u201csecuritization\u201d of NFTs, i.e. the shared ownership of one copy by multiple users, which, in the authors\u2019 opinion, no longer corresponds to criteria of non-reproducibility, indivisibility and uniqueness. <\/p>\n
Among other threats, the prosecutors see the \u201cinflation of prices\u201d on NFTs, triggered by marketing methods such as airdrops, blind boxes and limited sales. Taking the ambitious breed of esthetic and economic analysis, the authors mention a lack of \u201cartistic beauty\u201d and \u201creasonable pricing mechanism\u201d behind the inflated prices of some non-fungibles. According to procuratorate, marketing models such as rewards and dynamic rights and interests can also easily evolve into illegal pyramid schemes. <\/p>\n
Related: <\/u><\/em><\/strong>Chinese city public servants to receive digital yuan salaries starting May<\/em><\/strong><\/p>\n The proposed reaction to these risks includes a \u201ccrackdown on criminal activities\u201d, equal emphasis on punishment and governance and investment in risk research and law popularization. Going by the article, it is the national prosecutors who would take on a mission to separate a \u201ctrue innovation\u201d from the \u201cpseudo\u201d one and protect the former one. <\/p>\n China has not changed its anti-crypto stance even despite the steady progress in crypto adoption by Hong Kong. Moreover, the country seems to take the same hostile approach toward Artificial Intelligence (AI). 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. <\/p>\n While the NFT market \u201chas certain potential\u201d, it bears financial, security and \u201clegal\u201d risks, as Chinese prosecutors believe. Hence, the market needs not only comprehensive governance but a crackdown on \u201cpseudo-innovation.\u201d<\/p>\n