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Saturday, September 24, 2022

WeChat From China Bans Crypto And NFT Accounts

WeChat, China’s top social media platform. Updated its policies to ban accounts that provide access to crypto or NFT-related services.

The new guidelines state that accounts that were involved with the issuance, trading, and financing of crypto and NFTs will be either restricted or banned and will fall under the “illegal business” category.

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The policy also covers secondary NFT trading, with the firm noting that “accounts that provide services or content related to the secondary transaction of digital collections shall also be dealt with in accordance with this article.”

The move made by WeChat was highlighted by Hong Kong-based crypto news reporter Wu Blockchain (Colin Wu) on June 20, as he pointed out the significance of the action given that WeChat has more than 1.1 billion daily users in China.

Punishment For Not Complying With WeChat’s Policies

In terms of punishments, the new policy states that “once such violations are discovered, the WeChat public platform will, according to the severity of the violations, order the violating official accounts to rectify within a time limit and restrict some functions of the account until the permanent account is banned.”

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The Chinese government rolled out a phased ban on the local crypto sector between May and September last year. However, given the timing of the latest policy update on WeChat, it could suggest the platform has been letting some crypto activity go unnoticed since then.

Furthermore, there is still a regulatory gray area in the country concerning NFTs as the assets can be purchased in fiat. Still, companies and platforms generally bar secondary trading to avoid potential compliance issues over the financialization of the tech.

In general, officials have frowned upon NFTs, with the China Banking Association, the China Internet Finance Association, and the Securities Association of China issuing a joint statement in April warning the public about the “hidden risks” of investing in the assets.

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