NFT complaints in China surge 300-fold in 2022 as crypto market faces regulatory, commercial risks
- Pricing and service issues were among the top complaints to China’s market regulator about non-fungible tokens, but were a small fraction of the total
- NFTs present a challenge to regulators as Beijing has sought to reduce risk exposure while bolstering the domestic blockchain industry
The number of NFT-related complaints filed through an official SAMR platform reached 59,700 last year, a significant jump from the 198 cases in 2021, when hype around the technology was at its peak but Chinese tech firms were still testing the waters with so-called digital collectibles. The complaints cover refund refusals, price manipulation and extra fees, according to the regulator.
“Problems arise in nascent business models, which makes it increasingly difficult for regulators,” the SAMR said.
In mainland China, most NFTs are referred to as digital collectibles and can only be bought with legal tender, typically yuan, because of Beijing’s ban on cryptocurrencies. The national government has routinely cracked down on the blockchain-based assets for years, seeing crypto as a threat to financial stability.