Several Chinese IT giants like Tencent and Alibaba have shown interest in and even launched their own digital collecting platforms for NFTs earlier this year. However, as it became more popular, the government began to take notice and issued warnings to investors about the possibility of fraud with these NFTs.
One of Tencent’s NFT platforms was shut down on July 1; the other is trying to stay alive. A report in a local daily claims that the process of winding down started in May. T the internet firm relocated key executives in charge of NFT platform management, and by July 1, it had eliminated all digital collectibles from its Tencent News mobile app.
Beijing Government Crackdown
Due to the government’s stringent legislation, purchasers are unable to resell their NFTs in private transactions after purchasing them, resulting in a decrease in sales and the eventual shutdown of Tencent’s NFT platform. The absence of a secondary market for these digital goods eliminates any potential of profiting from them.
Social media giants Weibo and WeChat began deleting accounts linked to digital collecting platforms in March. This was on anticipating an impending government crackdown on the industry. Alibaba built an NFT platform in June but promptly removed all online references to it. The Chinese government has constantly been curbing crypto and NFT growth over the years.
As a result, many IT companies have decided to steer clear of NFTs entirely. This is being done, in order to avoid seeming to be in opposition to the government. It’s all for fear of NFT-induced chaos.