The Chinese government has released a statement declaring that anyone caught stealing digital collections, which include digital collectibles such as NFTs, will be subject to criminal penalties.
The statement added that the theft of digital collections would also be evaluated alongside other related offenses committed during the theft, including hacking into computer systems and data theft.
The new regulations issued yesterday confirm that digital collectibles such as NFTs can be considered as online virtual property, due to their unique codes, non-tamperable features, and detailed transaction information.
The Chinese government referring to digital collections as “network virtual property” is a significant milestone considering that the country banned all crypto-related transactions and activity back in late 2021.
“The theft of digital collections violates the protection law and interests of the crime of illegally obtaining computer information system data,” the Chinese government said in its statement. “Since property is the object of property crime, digital collections can obviously become the object of property crime. If the digital collection is stolen by intrusion into the system or other technical means, the act also damages the property law.”
The statement emphasizes that China has not yet established a “secondary flow market” for these digital collections. However, consumers can still utilize trading platforms to buy, collect, transfer, or dispose of these assets, guaranteeing exclusive ownership and control.
Throughout this year, China has experienced a surge in civil disputes related to cryptocurrencies. Various courts have issued conflicting rulings, with some affirming that virtual assets are legally protected while others assert otherwise. In May, Chinese prosecutors declared their intention to clamp down on what they referred to as “pseudo-innovations” within the country’s NFT market.
There has been also been a growing interest in NFTs within the country despite the ban. Last month, China Daily, the country’s English-language state-owned newspaper, announced the launch of its own metaverse and NFT platform that is set to be released sometime next year. In its announcement, China Daily offered 2.8 million Chinese yuan (approximately $384 million) to a third-party contractor – Chinese or foreign – that can develop its Zhongbao Shuzang NFT issuance platform within 3 months.
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