China has recently taken a significant step towards offering protection for nonfungible tokens (NFTs) by officially issuing a legal commentary on dealing with cases of theft and recognizing NFTs as virtual property protected by law. This move comes in response to conflicting judicial opinions on the state of cryptocurrency in the country.
According to a publication by China’s state-controlled Southwest University of Political Science & Law (SUPL), digital collectibles such as NFTs have distinct characteristics that make them unique and non-tamperable. They possess unique codes and detailed transaction information, which makes them different from ordinary online images and conform to the characteristics of online virtual property. This has led jurists to conclude that NFTs have both use value and exchange value, making them protected by law as objects of rights.
The legal commentary explains that the theft of NFTs carries applicable criminal penalties, especially in conjunction with related offenses committed during the course of the theft, such as hacking into computer systems or data theft. The commentary emphasizes that digital collections have technical characteristics that cannot be copied, giving the holder exclusive control over the property. Should the digital collection be stolen, the holder loses exclusive control. The publication also notes that although the secondary circulation market for NFTs has not yet been opened in the country, consumers can rely on trade platforms to complete operations such as purchase, collection, transfer, and destruction, thereby achieving exclusive possession, use, and disposal rights.
This announcement follows the rise in civil disputes involving cryptocurrencies in China, with courts previously ruling both in favor and against the protection of virtual assets. The Chinese government’s move to provide legal protection for NFTs signals a significant shift in its stance on cryptocurrencies and offers clarity to market participants.
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Meanwhile, Linekong Interactive, a Chinese tech firm listed on the Stock Exchange of Hong Kong (HKEX), has revealed plans to kickstart a $15 million fund dedicated to revitalizing the Bitcoin (BTC) ecosystem. The fund, dubbed “BTC Next,” will accelerate novel projects developing asset issuance, exchanges, virtual machines, NFTs, and GameFi protocols on the Bitcoin blockchain. Linekong’s initiative underscores the growing interest in blockchain technology and investment opportunities in the crypto space.
Furthermore, Swiss fintech SEBA Bank has received a license from Hong Kong’s Securities and Futures Commission, allowing it to conduct regulated activities in the region and distribute virtual asset-backed securities, advise on crypto assets, and manage crypto investment accounts on behalf of clients. This development highlights the growing acceptance of cryptocurrency-related activities in traditional financial hubs and the increasing importance of regulated entities in the crypto economy.
These announcements reflect the growing recognition and acceptance of cryptocurrency and blockchain technology by governments and financial institutions around the world. As the crypto industry continues to evolve, legal protections and regulatory clarity will play a crucial role in fostering innovation and enabling broader adoption of blockchain-based technologies.
