In China, a court ruled that legally speaking, NFTs have the attributes of virtual property and are governed by the Law of Electronic Commerce.
NFTs are “unique digital assets created in a blockchain network, based on consensus” that “belong to the category of networked virtual property.” That was the ruling of a specialized Hangzhou Internet Court during its review of the “legal attributes” status of the non-fungible tokens.
The article states that NFTs “possess the object characteristics of property rights, such as value, rarity, manageability, and saleability.” Thus, NFTs in China can now be protected under state law. It is a good sign for the industry because non-fungible tokens have remained in a “gray area” since the cryptocurrency ban.
The ruling came during a lawsuit against the technology platform, whose two unnamed users sued for the site’s refusal to complete a trade with NFT during an “urgent sale.” The site’s administration justified its decision because one of the users provided the wrong name and phone number.
The final decision in the case has yet to be made. Still, the court has recorded the fact that the transaction will be considered a “sale of digital goods over the Internet” that falls under the definition of e-commerce and is regulated by the Law of Electronic Commerce.
In China, local authorities have been working to create a domestic NFT market since early 2022. In addition, China is a leader in the development of CBDC and plans to become a leader in the sector of Metaverse technology.
