Hangzhou Internet Court rules NFTs legally protected virtual property
Recently, a court in Hangzhou ruled that NFTs represent a protected form of digital property according to the laws of PRC. The decision is part of a broader case between a customer and their attempts to sell a series of tokens on a platform.
Based in the eastern province of Zhejiang, the court oversaw a case where a digital art platform cancelled a sale of a user’s NFTs on his behalf. Following this, the user sued them, claiming that this was done without his permission.
According to the company, the reason it cancelled the sale was due to the user having inaccurate personal details. Following KYC legislation, orders placed with inaccurate names had to be cancelled.
Hangzhou’s Internet Court stated that NFTs and collections possess the same characteristics of physical assets, these being value, scarcity, controllability (by owner) and more. As a result, NFTs must be considered assets.
In addition, the court stated that NFTs belong in a more bespoke category of virtual property, along with it being within the remit of China’s ‘E-Commerce Law’ due to the nature of their purchase and sale.
In 2021, the People’s Republic of China’s government enacted the latest in a series of crackdowns against cryptocurrencies and related activities, including trading and mining digital assets. Even while this happened, NFTs were not so much stopped, but heavily regulated to prevent speculation.