Key Takeaways
- As part of the new rule, WeChat public accounts involved in the issuance, trading and financing of crypto and NFTs will be banned
- The rule also applies to accounts that provide services or content related to the secondary transaction of digital collections.
China is grabbing the attention of crypto enthusiasts again. The recent news comes in the form of Messaging giant WeChat deciding to ban crypto and NFT-related accounts on its platform. WeChat states that “engaging in virtual currency or digital collection business” under its “Illegal business operations” is considered as “violating content.”
The accounts banned include those of transaction and exchange businesses between virtual and fiat currency or between cryptocurrencies, those that provide information, mediation, and pricing services for crypto transactions, as well as the accounts involving token issuance financing and cryptocurrency derivatives trading. WeChat’s new rules also apply to accounts that provide services or content related to the secondary transaction of digital collections.
According to WeChat, if found violating the rule, the messaging platform will assess the severity of the violations and then order the violating official accounts to rectify within a time limit and restrict some functions of the account until the permanent account is banned.
The Chinese Government has always viewed the world of crypto with suspicion. In May last year, China banned financial institutions and payment companies from providing services related to cryptocurrency transactions and issued similar bans in 2013 and 2017. In September, Chinese regulators clarified that cryptocurrency transactions and mining are illegal, making the country one of the least favorite places for crypto traders.
Chinese Government has always given mixed signals regarding its local NFT industry, leaving investors confused about where the local market may be headed.Beijing has implemented rules that restrict participants from issuing or buying tokens based on securities, insurance, loans, and precious metals. Platforms and firms however have now restricted themselves from engaging in NFT trade fearing government clampdown.
WeChat, recently took down one of China’s most famous NFT ecosystems, Xihu No.1, from its platform, citing that it was violating its active rules of service. Ant Group-backed WhaleTalk, a digital collectible platform, also increased the penalty for individuals making use of its over-the-counter desk for the purpose of NFT trading in a recent policy update. The lack of proper regulatory guidelines makes NFT trading confusing in the country.
