China to protect NFTs
In a surprise move, the Chinese government has guaranteed legal protection for NFTs.
In response to a series of often conflicting judicial opinions on the state of cryptocurrency in the country, the Chinese government has officially issued a legal commentary on dealing with cases of nonfungible tokens (NFTs) theft and their status as virtual property protected by law.
According to a Nov. 9 publication by China’s state-controlled Southwest University of Political Science and Law (SUPL), digital collectibles such as NFTs — unlike ordinary online images — conform to the characteristics of online virtual property due to their non-tamperable features, unique codes and detailed transaction information.
“This highlights the scarcity of digital collections, which have both use value and exchange value,” jurists write. “According to Article 127 of the Civil Code, it can be seen that from the perspective of civil law, online virtual property is regarded as an object of rights that ‘is different from property rights, creditor’s rights, intellectual property rights, etc. and is protected by civil law’.”
In addition, jurists state that the theft of NFTs, therefore, carries applicable criminal penalties, which can be evaluated in conjunction with related offenses committed during the course of the theft, such as hacking into computer systems or data theft.
“Digital collections have technical characteristics that cannot be copied, indicating that the holder has exclusive control. If the digital collection is stolen by others, the holder loses exclusive control,” jurists from SUPL say.
“Although our country has not yet opened the secondary circulation market for NFTs, consumers can rely on the trading platform to complete operations such as purchase, collection, transfer, and destruction, and achieve exclusive possession, use, and disposal rights.”
China has seen a rise in civil disputes this year involving cryptocurrencies, with some…
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