China-based regulatory and trade associations target NFTs in latest risk notice
The China Banking Association, China Internet Finance Association, and Securities Association of China issued a joint statement warning the public about the “hidden risks” of investing in nonfungible tokens, or NFTs.
In a Wednesday notice, the three associations launched initiatives aimed at encouraging innovation in the crypto and blockchain space focused on NFTs as well as “resolutely curb[ing] the tendency of NFT financialization and securitization” to reduce the risks around illicit activities. The China Banking Association said member institutions should not consider NFTs assets like securities, precious metals, and other financial products.
In addition, cryptocurrencies including Bitcoin (BTC), Ether (ETH), and Tether (USDT) should not be used for the pricing and settlement of NFT transactions, platforms should perform real-name authentication and follow anti-money laundering requirements, and associations and firms in compliance should not invest in NFTs or provide financial support for doing so. Other measures in the proposed code of conduct included not providing centralized transactions and not weakening tokens’ non-fungibility “by dividing ownership or batch creation, and carrying out token issuance financing in disguise.”
“We solemnly call on consumers to establish correct consumption concepts, enhance their awareness of self-protection, consciously resist NFT speculation and speculation, be vigilant and stay away from NFT-related illegal financial activities, and effectively safeguard their own property safety,” said the associations. “If relevant illegal activities are found, they should be reported to the relevant departments in a timely manner.”
The associations proposed:- NFTs shouldn't represent financial
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