The court said NFTs are “unique digital assets” that “belong to the category of virtual property” in a case where it had to confirm the legal attributes of NFTs.
A Chinese court within the town of hangzhou has said nonfungible token (NFT) collections are online virtual property that ought to be protected below Chinese law.
A Nov. 29 article announce by the hangzhou internet Court — a specialist net court — shared by crypto blogger wu Blockchain on Dec. five reveals the favorable language for NFTs once the country began to crack down on cryptocurrencies in 2021, leaving NFTs in an exceedingly legal gray area.
Translated, the article says NFTs “have the item characteristics of property rights like worth, scarcity, controllability, and tradability” and “belong to network virtual property” that “should be protected by the laws of our country.”
The court set it necessary to “confirm the legal attributes of the NFT digital collection” for a case and admitted “Chinese laws presently don't clearly stipulate” the “legal attributes of NFT digital collections.”
The decree by the court was brought forward in a very case wherever the user of a technology platform, each unknown, sued the corporate for refusing to finish a purchase and canceling their purchase of an NFT from a “flash sale” as a result of the user provided a name and phone number that allegedly didn’t match their information.
“NFTs condense the creator's original expression of art and have the worth of related intellectual property rights,” the court aforementioned. It added NFTs are “unique digital assets formed on the blockchain based on the trust and consensus mechanism between blockchain nodes.”
Due to this reason, the court same, “NFT digital collections belong to the class of virtual property” and also the transaction within the legal case is seen because the “selling of digital goods through [the] web,” which might be treated as an e-commerce business and “regulated by the ‘E-commerce Law.’”
It comes when the Shanghai High People’s Court issued a document in could that stated Bitcoin BTC tickers down $16,997 is equally subject to property rights laws and regulations despite the country’s ban on crypto.
Related: might hong kong really become China’s proxy in crypto?
With its crypto ban, China has worked to separate NFTs from crypto with a government-backed blockchain project to support the preparation of non-crypto NFTs procured with fiat money.
The government remains argus-eyed to confirm its population resists “NFT speculation” as delineated in an April joint statement between the China Banking Association, the China web Finance Association and also the Securities Association of China that warned the public about the “hidden risks” of finance in NFTs.
China isn’t the sole jurisdiction to place NFTs under property laws. A Singaporean high court decide drew on existing property laws in an Oct case comparing NFTs to property like luxury watches or fine wine saying “NFTs have emerged as a highly sought-after collectors’ item.”
(JESSE COGHLAN, Cointelegraph, 2022)