The Chinese government has issued a statement announcing that individuals caught stealing digital collections, including digital collectibles like NFTs (Non-Fungible Tokens), will face criminal penalties. The statement emphasizes that the theft of digital collections will be assessed alongside other related offenses committed during the act, such as hacking into computer systems and data theft.
In a noteworthy development, the new regulations, released recently, affirm that digital collectibles like NFTs can be considered as online virtual property. This classification is based on their unique codes, non-tamperable features, and detailed transaction information.
This move is significant in light of China’s previous ban on all cryptocurrency-related transactions and activities in late 2021. The Chinese government’s reference to digital collections as “network virtual property” represents a notable shift in its stance.
In its statement, the Chinese government declared, “The theft of digital collections violates the protection law and interests of the crime of illegally obtaining computer information system data. 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 underscores that China has not yet established a “secondary flow market” for these digital collections. Despite this, consumers can still use trading platforms to buy, collect, transfer, or dispose of these assets, ensuring exclusive ownership and control.
In the course of this year, China has witnessed a rise in civil disputes related to cryptocurrencies. Courts have issued conflicting rulings, with some affirming that virtual assets are legally protected, while others argue otherwise. In May, Chinese prosecutors announced their intention to crack down on what they referred to as “pseudo-innovations” within the country’s NFT market.
Interestingly, there has been a growing interest in NFTs within China despite the ban. Last month, China Daily, the country’s English-language state-owned newspaper, revealed plans to launch its own metaverse and NFT platform scheduled for release next year. In the announcement, China Daily offered 2.8 million Chinese yuan (approximately $384 million) to a third-party contractor—either Chinese or foreign—that can develop its Zhongbao Shuzang NFT issuance platform within three months.
