The top social media platform in China, WeChat, has updated its policies to ban accounts that provide access to crypto or nonfungible token- (NFT)-related services.
Under the new guidelines, accounts 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.
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 was highlighted by Hong Kong-based crypto news reporter Wu Blockchain (Colin Wu) on Monday, as he pointed out the significance of the action given that WeChat has more than 1.1 billion daily users in China.
WeChat with more than 1.1 billion daily active users in China, has updated its rules: WeChat public accounts which involved in the issuance, trading and financing of crypto and NFTs will be limited function or banned. https://t.co/0I9oMrvFTp pic.twitter.com/mzclYjFZNg
— Wu Blockchain (@WuBlockchain) June 20, 2022
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.”
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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Popular platforms such as WeChat and Ant group-owned WhaleTalk have been distancing themselves from the tech since March after they both reportedly began removing or restricting NFT platforms from their networks over a lack of regulatory clarity and fear of a crackdown from Beijing.
Despite this, a local media report from Thursday highlighted data showing the number of digital collectible platforms in China has grown to over 500, a five-time increase since February 2022.