China’s public security department reports first domestic NFT scam case

November 23, 2022

By Anjali Kochhar

The police department in Shangqiu, Central China’s Henan Province has cracked down on a non-fungible token (NFT) collection scam case involving more than 2.65 million yuan ($372,196.24), the Chengdu Economic Daily reported.

According to legal experts, the case was the first NFT collection-related crime officially reported by a public security department, the report noted.

The local police, after receiving a tip-off, said a group of eight members committed crimes by selling virtual cartoon pictures based on mobile app platforms and using so-called cashback, rewards and prize pool to scam more than 2.65 million yuan of income.

From 2019 to November 2022, there were a total of 2,303 platforms involved in the business of NFT collections in China.

As of press times, over 1,800 NFT collection-related reports on the Chinese consumer complaints platform Black Cat.

In April 2022, the National Internet Finance Association of China, China Banking Association and Security Association of China co-issued an appeal to prevent NFTs from triggering systematic financial risks, reported the Xinhua News Agency.

In September, the China Mobile Communication Association and the China Communications Industry Association vowed to boycott the excessive speculations on NFT collections, according to the Securities Daily.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.