On May 15th, the People’s Republic of China’s (PRC) Supreme People’s Procuratorate (SPP) talked about its opinions regarding the NFT Market (non-fungible tokens). The SPP is the national body that looks after everything regarding legal prosecution. In its article on the matter, three of the authors laid down how the prosecutors viewed the risks of the NFT market and why they needed to play an even more active role in fighting them.
SPP’s Thoughts On The NFT Market
The attention of the article is focused on the NFT market’s tendency of “securitization”. This refers to how one copy has multiple owners on a model of sharing. In the opinion of the authors, this tendency does not conform to the requirement of the commodity to be unique, indivisible, and non-reproducible.
Other threats of the NFT Market pointed out include the prosecutors’ view on how prices of the tokens get “inflated” via methods in marketing like limited sales, airdrops, and blind boxes. The authors seemingly blend economic analysis and aesthetics in an unorthodox manner and consider some of the tokens of the NFT market’s inflation as lacking artistic beauty as well as a reasonable mechanism for pricing.
As per the words of the SPP, marketing models like interests, rewards, and dynamic rights do not take much time to become pyramid schemes that are outside the purview of the law. As such, the paper proposes a “crackdown” as a reaction to the risks that the NFT market proposes.
It equally emphasizes governance and punishment as well as law popularization and investing in researching the risks. As per the SPP’s article, the prosecutors working for the nation will consider it a mission and separate the “pseudo” from the “true innovation” in an effort to keep the latter protected.