Tencent, Alibaba tighten platform rules on digital collectibles as NFTs remain a grey area in China

Tencent Holdings and Alibaba Group Holding are tightening rules that apply to non-fungible tokens (NFTs) on their platforms, as Chinese tech giants take preemptive measures to avoid potential scrutiny of the tokens, which are referred to as digital collectibles in the country because NFTs still operate in a grey area.

In newly updated terms of service, Alibaba affiliate Ant Group’s NFT platform Jingtan said that it would “alert the police and hand over [details] to judicial authorities” if users are found to be organising transactions outside the platform in ways that constitute criminal activities.

Buyers who use specialised software to snatch up digital collectibles during sales, or those who engage in money laundering and fraudulent activities, will also be reported to authorities, the company said.

Alibaba, owner of the South China Morning Post, did not immediately respond to a request for comment.

Separately, all-purpose super app WeChat, operated by social and gaming giant Tencent, has over the past few weeks banned several mini programs offering digital collectibles.

Among those banned was West Lake No 1, a digital collectible mini program offered by Hangzhou-based, Shenzhen-listed silk product manufacturer Wensli. In a statement published last week, West Lake No 1 said WeChat justified the ban by saying digital collectibles were among mini program service categories that had yet to be “opened up”. It added that it was now working on releasing a separate webpage and an app.

Dongyiyuandian and TheOne.art, two other digital collectible sellers, also had their mini programs banned by WeChat during the past few weeks, for the same reason.