WeChat Restricts Crypto Assets Related Accounts.
WeChat, the Chinese messaging app with over 1 billion users, has announced that it will not be enabling any cryptocurrency or non-fungible token (NFT) related accounts within its platform. This announcement comes as a surprise to many in the industry, as WeChat is known for being extremely innovative and forward-thinking.
It is unclear at this time what prompted this decision by WeChat, but it is likely due to China’s current stance on cryptocurrencies and recent regulatory crackdowns. Despite this news, there is still hope that WeChat may change its mind in the future and allow for crypto and NFT-related accounts to proliferate within its platform. In the meantime, other platforms such as DAppNode are emerging as viable alternatives.
The company says in its policy that “accounts that supply services or material linked to the secondary transaction of digital collections must also be dealt with,” which indicates that secondary NFT trading is also covered by the policy.
WeChat, the most popular social media platform in China, has recently amended its policy to prohibit the creation of accounts that provide access to services that are associated with cryptocurrencies or nonfungible tokens (NFT). According to the new regulations, accounts that are involved with the issuance, trading, and financing of cryptocurrencies and NFTs will either be restricted or banned and will be classified as “illegal businesses.”
WeChat Ruled Indirectly on NFT Accounts in accordance with China’s Ban on Crypto
The company notes 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.” This means that the policy covers secondary NFT trading as well.
On Monday, Hong Kong-based crypto news reporter Wu Blockchain (Colin Wu) brought attention to the move by pointing out the significance of the action given that WeChat has more than 1.1 billion daily users in China. He highlighted the significance of the action by highlighting the move.
According to the new policy, disciplinary actions will be taken in accordance with the following phrase: “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.”
Between May and September of last year, the Chinese authorities implemented a gradual ban on the local cryptocurrency industry. This took place in China. On the other hand, taking into account the timing of WeChat’s most recent policy update, it is possible to deduce that the platform has been allowing some crypto-related activity to go unnoticed since the previous update.
In addition, despite the fact that non-fungible tokens (NFTs) may be bought with fiat currency, the nation is currently in the regulatory limbo stage with regard to NFTs. However, in order to prevent any compliance concerns brought on by the financialization of the technology, corporations, and platforms almost always prohibit secondary trading.
The Chinese Finance Industry Consistently Warn about the Dangers of Cryptocurrency
The China Banking Association, the China Internet Finance Association, and the Securities Association of China issued a joint statement in April warning the public about the “hidden risks” of investing in NFTs. In general, officials have looked down on NFTs, and the statement was issued as part of a coordinated effort to discourage investment in the assets.
Since March, well-known platforms like WeChat and WhaleTalk, which is owned by the Ant group, have been distancing themselves from the technology. Both WeChat and WhaleTalk are rumored to have begun removing or restricting access to their networks by non-fiat currency platforms due to a lack of regulatory clarity and the fear of a crackdown by Beijing.
In spite of this, a report that was published in the local media on Thursday highlighted data that showed the number of digital collectible platforms in China has grown to over 500, which is a five-time increase since February 2022.