Chinese Prosecutors Target Pseudo-Innovation in NFT Market

Separating True Innovation from Pseudo in the NFT Market: China’s Prosecutors Take a Stand
Chinese Prosecutors Target Pseudo-Innovation in NFT Market

The highest legal prosecution agency in China, the Supreme People’s Procuratorate, recently expressed its views on the NFT (non-fungible token) market. In a published article, three authors highlighted the risks and emphasized the need for more active enforcement.

The article focuses on the growing trend of “securitization” in NFTs, where multiple users share ownership of a single copy. According to the authors, this undermines the key characteristics of NFTs, such as being unique, indivisible, and non-reproducible.

To address these risks, prosecutors propose a crackdown on criminal activities, emphasizing both punishment and governance. They also advocate for investing in research to better understand and mitigate risks, while promoting public understanding of the law. The article suggests that national prosecutors are dedicated to distinguishing genuine innovation from deceptive practices and safeguarding true advancements in the field.

Despite Hong Kong’s growing crypto adoption, China remains steadfast in its opposition to cryptocurrencies. Furthermore, the country maintains a similarly unwelcoming stance toward Artificial Intelligence (AI). A notable incident in early May involved the arrest of an individual in China’s Gansu district who allegedly employed ChatGPT to create fabricated news articles.

Chinese prosecutors express concerns about the financial, security, and legal risks associated with the NFT market, despite acknowledging its potential. They emphasize the necessity for robust governance and a firm approach against deceptive innovations.

Also Read: Despite Ban, Chinese Banks offer tie-ups with Hong Kong Crypto Firms

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