WeChat, the most popular social media platform in China, has banned several accounts belonging to non-fungible token (NFT) marketplaces. The company stated that cryptocurrency speculation on the platforms was the main reason for the account closures.
The closed accounts showed an error message from WeChat that read, “No legal permit or license to publish, disseminate or engage in such business.”
WeChat targets small and medium-sized companies
The affected accounts include those of Art Meta Yuanyishu, Zero Earth, iBox, Yuanben Space, and Nuofangti. However, the WeChat account of Tencent Magic Core was not affected, leading to speculation that only small or medium scale companies were affected.
“According to relevant national regulations, in order to prevent the risk of speculation in virtual currency transactions, the WeChat public platform has recently standardized and rectified public accounts and small programs for speculation and secondary sales of digital collections,” WeChat’s team said in a statement.
In order to be compliant, the firms are expected to register with the China Cyberspace Administration. And according to Chinese rules, NFT marketplaces are not allowed to engage in resales.
An unnamed source claimed WeChat had sent notices to NFT marketplaces with accounts on the platform to provide proof of their qualifications to engage in the said business activities.
NFTs have soared in popularity in China despite its hard line on cryptocurrencies. Ant Group and Tencent Holdings have risen as market leaders in the space selling out collections for millions of dollars.
The stampede for NFTs might be irrational to outsiders because of the government’s ban on reselling them. Several investors are snapping up pieces in the hopes that their values will skyrocket in the future when the ban is lifted.
The country’s state news agency famously issued digital news collectibles in December. The collectibles will operate on the Tencent Cloud blockchain platform with the release being in the thick of the crackdown on cryptocurrency activities.
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