The policy also covers secondary NFT trading, as the company notes that “accounts providing services or content related to the secondary transaction of digital collections must also be addressed.”
China’s leading social media platform WeChat has updated its policies to ban accounts that provide access to cryptocurrency or NFT services.
Under the new guidelines, accounts involved in issuing, trading and financing cryptocurrencies and NFTs will be restricted or banned and will fall under the category of “illegal activity”.
The policy also covers secondary NFT trading, with the company noting that “accounts that provide services or content related to the secondary digital collection transaction will also be treated in accordance with this section.”
The move was highlighted by Hong Kong-based cryptocurrency reporter Wu Blockchain (Colin Wu) on June 20, when he stressed the importance of the action given that WeChat has over 1.1 billion daily users in China.
WeChat, with over 1.1 billion daily active users in China, has updated its rules: WeChat public accounts involved in issuing, trading and financing cryptocurrencies and NFTs will be restricted or banned. https://t.co/0I9oMrvFTp pic.twitter.com/mzclYjFZNg
– Wu Blockchain (@WuBlockchain) June 20, 2022
In terms of sanctions, the new policy states that “once such violations are discovered, the WeChat public platform, depending on the severity of the violations, will order the offending official accounts to rectify within a period of time and limit certain functions. From the account up to when the permanent account is not banned.
The Chinese government introduced a gradual ban on the local cryptocurrency industry between May and September last year. However, given the timing of the latest policy update on WeChat, this could suggest that the platform has overlooked some cryptocurrency activity since then.
Additionally, there is still a regulatory gray area in the country regarding NFTs, as assets can be bought in fiat. However, companies and platforms generally ban secondary trade to avoid potential compliance issues related to the financialization of the technology.
Officials generally frowned upon NFTs, with the China Banking Association, China Internet Finance Association, and Securities Association of China issuing a joint statement in April warning the public of the “hidden risks” of investing in assets.
Popular platforms like WeChat and WhaleTalk, owned by Ant Group, have abandoned the technology since March after both reportedly began removing or restricting NFT platforms from their networks due to lack of regulatory clarity and fear of repression by Beijing.
Despite this, a June 16 local media report highlighted data showing that the number of collectible digital platforms in China has risen to over 500, a 5-fold increase from February 2022.