July 19, 2022
By Murtuza Merchant
Tencent, the huge Chinese internet and technology company, has shut down its NFT marketplace.
Although there has been no official news, many within the industry believe it is due to legal reasons surrounding government policy.
NFTs are not actually banned in China, but recent government guidelines make it difficult.
Tencent closes NFT trading marketplace
According to local reports, Tencent officially began withdrawing from the NFT market in May.
In this process, they moved all top executives working on the NFT marketplace to new departments. It has now closed at least one of its two NFT marketplaces.
In June, several Chinese tech giants, including Tencent and others, signed a pact to withdraw from the secondary trading market for NFTs. Furthermore, Chinese state media also said they would ‘self regulate’ their current actions in the space.
Does China allow NFTs?
Well, the answer is both yes and no. NFTs are not officially illegal in China in the way that cryptocurrencies are.
However, the country has warned investors about the risks of NFT trading.
At the start of the year, many thought this would be the year of NFTs in China. But, things have changed, and it is clear that companies are choosing not to continue their NFT strategy.
Companies like Tencent no longer want to trade NFTs. It is unsure whether they do not want to undermine the government or future NFT laws.
Recent policies aimed at NFT technology have made it increasingly hard for NFT trading. For example, one new Chinese government NFT policy restricts the resale of NFTs.
This policy makes it quite difficult for anyone to make a profit from their digital collectibles.
For Tencent, it makes sense to close its NFT trading marketplace instantly.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.
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