The NFT market continues to heat up, and the three associations have initiated initiatives to prevent related financial risks

The NFT market continues to heat up, and the three associations advocate to prevent related financial risks

The NFT market continues to heat up, and the three associations advocate to prevent related financial risks. NFT is a digital currency based on blockchain technology Certificates have the characteristics of being unique, indivisible and traceable. The NFT market continues to heat up, and the three associations have initiated initiatives to prevent related financial risks. The NFT market continues to heat up, and the three associations have advocated the prevention of related financial risks 1

The China Internet Finance Association, the China Banking Association, and the China Securities Association jointly called on member units to jointly launch an initiative to prevent NFT (non-identical) Initiatives on financial risks related to qualitative tokens, resolutely curb the tendency of NFT financialization and securitization, and strictly prevent the risks of illegal financial activities.

In recent years, my country’s NFT market has continued to heat up. As an innovative application of blockchain technology, NFT has shown certain potential value in enriching digital economic models and promoting the development of cultural and creative industries. However, it also has risks such as speculation, money laundering, and illegal financial activities.

In this regard, the three associations advocated adhering to the bottom line of behavior and preventing financial risks. The first is not to include financial assets such as securities, insurance, credit, precious metals, etc. in the underlying commodities of NFT, and to issue and trade financial products in disguise; the second is not to weaken the non-homogeneous characteristics of NFT by dividing ownership or batch creation, and to carry out token issuance and financing in disguise (ICO); The third is not to provide centralized trading, continuous listing trading, standardized contract trading and other services for NFT transactions, and to set up trading venues in disguised violation of regulations;

The fourth is not to use Bitcoin, Ethereum, Tether, etc. Virtual currency serves as a pricing and settlement tool for NFT issuance transactions; fifth, real-name authentication of issuance, sales, and purchase entities, properly preserving customer identity information and issuance transaction records, and actively cooperating with anti-laundering work; sixth, not investing directly or indirectly in NFT , does not provide financing support for investing in NFT.

At the same time, the three associations also advocated the rational selection of application scenarios, standardized application of blockchain technology, and the positive role of NFT in promoting industry digitization and digital industrialization; ensuring that NFT The value of the product is fully supported to guide consumers to consume rationally and prevent prices from being inflated and deviating from the basic law of value; protect the intellectual property rights of underlying commodities and support genuine digital cultural works; truly, accurately and completely disclose NFT product information to protect consumers The right to know, the right to choose, and the right to fair dealing.

Dong Ximiao, chief researcher of Merchants United Finance, suggested that investors should fully understand the value and risks of NFT and not participate in illegal NFT speculation and transactions. It is difficult for ordinary investors to fully understand virtual currencies, ICOs, NFTs, etc. It is recommended not to invest blindly and should consciously resist all kinds of temptations to protect the safety of their own property. The NFT market continues to heat up, and the three associations have initiated initiatives to prevent related financial risks 2

Recently, the China Internet Finance Association, the China Banking Association, and the China Securities Association issued an initiative to prevent NFT-related financial risks, making it clear that they will resolutely curb NFTs. (Non-Fungible Token, non-fungible token) financialization and securitization tendency, and strictly guard against the risks of illegal financial activities.

This initiative not only affirms the positive role of NFT, that is, "NFT, as an innovative application of blockchain technology, has shown certain potential in enriching digital economic models and promoting the development of cultural and creative industries. "Value", and also warned about the financial risks related to NFT, and proposed to be wary of the risks and hazards of NFT such as speculation, money laundering, and illegal financial activities. This is timely and necessary for the "popular" NFT.

NFT is a digital certificate based on blockchain technology. It has unique, indivisible and traceable characteristics and can be used to mark the ownership of specific assets. Theoretically, any item in the real world, including a song, a painting, a piece of text, a game prop, etc., can be made into an NFT, and its application scope depends on people's imagination.

Precisely because the development space is full of imagination, an NFT trend has spread around the world in the past two years. Domestic Internet companies have also launched NFT platforms one after another, and many products have been sold out as soon as they were released.

At the same time, some illegal financial activities also flourished. For example, many institutions carry out illegal virtual currency and token financing transactions in disguise under the banner of NFT; some NFT underlying commodities hide financial assets such as securities, insurance, credit, precious metals, etc., and issue and trade financial products in disguise;

< p> There are also some NFT platforms that combine with overseas public chains to transfer NFT to digital wallets and then sell them on overseas platforms to achieve the purpose of money laundering. If things go on like this, it is likely to cause problems such as capital flight and the neglect of the foreign exchange management system, which will affect the financial order and Economic and social stability.

The core value of NFT is to provide an on-chain channel for the real world and act as a bridge between the physical world and the digital world. The current trend of financialization and securitization of some NFTs has undoubtedly deviated from the right track and destroyed the industry ecology. If allowed to develop, it will inevitably cause "bad money to drive out good money", which is detrimental to the health and long-term development of the industry.

Don’t recite the good sutra incorrectly. NFT is not a sign of deception or a gimmick for speculation, and the NFT industry cannot fall into the misguided path of eager for quick success and "getting a handful and leaving." Relevant departments should also speed up the improvement of relevant laws and regulations, fill regulatory gaps in a timely manner, and "clear mines" for the healthy development of NFT.

It is necessary to clarify the essential attributes of NFT-related activities with laws and regulations, qualitatively de-financialize NFT, formulate entry thresholds and industry standards, and regulate the issuance, trading, and storage of NFT Waiting process. At the same time, we actively explore effective supervision methods and severely crack down on the use of NFT for money laundering and illegal fund-raising to avoid possible financial or legal risks.

Any innovation should be based on legal compliance. For enterprises and platforms, they should practice the concept of science and technology for good, strengthen basic research, rationally select application scenarios, standardize the application of blockchain technology, and give full play to NFT plays a positive role in promoting industrial digitization and digital industrialization, and ensures that the value of NFT products is fully supported to prevent inflated prices from deviating from the basic law of value.

NFT, which represents a new direction in the application of blockchain technology and is endowed with the beautiful vision of "everything can be digitized," requires both the market's continued exploration and efforts to develop, and the regulatory authorities' tolerance, prudence, and regulation. guide. Consumers should also adhere to correct consumption concepts, enhance their awareness of self-protection, stay away from NFT-related illegal financial activities, and beware of being deceived. The NFT market continues to heat up, and the three associations have advocated preventing related financial risks 3

The potential financial risks of NFT (Non-Fungible Token, non-fungible token) are attracting much attention.

Recently, the China Internet Finance Association, China Banking Association, and China Securities Association jointly issued the "Initiative on Preventing NFT-related Financial Risks" (hereinafter referred to as the "Initiative"). The reporter noticed that some platforms have previously been cracking down on related risk speculation. For example, WeChat has banned or removed a number of public accounts from digital collection platforms; Ant Whale Explorer (a digital collection platform owned by Ant Group) also issued an announcement on penalties for users who violated the regulations and removed more than 180 illegal accounts.

Prohibition of “trading” is the key word

Specifically, the proposal mentions “stick to the bottom line of behavior and prevent financial risks.” It is clearly stated that we will resolutely curb the tendency of NFT financialization and securitization, including not including financial assets such as securities, insurance, credit, precious metals, etc. in NFT underlying commodities, and issuance of trading financial products in disguise. In addition, the proposal emphasizes that centralized trading (centralized bidding, electronic matching, anonymous trading, market makers, etc.), continuous listing trading, standardized contract trading and other services will not be provided for NFT transactions, and trading venues will be set up in disguised violations.

Xiao Sa, a partner at Beijing Dacheng Law Firm, told Securities Daily that NFT will promote the cultural and creative industry, and the digitization of artworks and artistic creation is the general trend. However, in the sales process of NFT, there has been a trend of financialization, especially the opening of the secondary market, which has further stimulated consumers' speculation psychology. This initiative was initiated by a financial self-regulatory organization rather than a cultural organization, which shows that the issue of financialization of digital collections has been highlighted and has been paid attention to by regulatory authorities.

In addition, in response to the initiative of the three associations, lawyer Yu Leimin, a partner of King & Wood Mallesons (Shanghai), interpreted that the initiative issued by the three associations this time stated that "not to provide centralized trading and continuous trading for NFT transactions" Listed transactions, standardized contract transactions and other services",

The above-mentioned transaction methods all have typical financial transaction characteristics, and are intended to remind various NFT business platforms in the market today that they should be based on "enriching digital economic models and promoting cultural exchanges. The business purpose of "creating industrial development" is to avoid carrying out exchange business and cut off the "signs" of financial securitization presented by illegal NFT business.

The industry generally believes that domestic digital collections currently exhibit several characteristics: first, they reduce the financial attributes of NFT; second, they draw a clear line with virtual currencies.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center of the International Joint Business School of Zhejiang University, told Securities Daily that the risks of NFT are not technical. NFT exists in the transaction process of confirming the rights of artworks. The characteristics of decentralization provide the ground for money laundering and fraud. Some people take advantage of people's misunderstandings about NFT to speculate.

He believes that many financial institutions currently lack an objective and comprehensive understanding of NFT, and it is necessary to prevent risks. For the current domestic digital collection platforms, the key word is still prohibiting “trading”.

Many platforms are increasing penalties for violations

As early as February this year, the China Banking and Insurance Regulatory Commission issued the "Risk Warning on Preventing Illegal Fund-raising in the Name of "Yuanverse"". And this time, the proposal has undoubtedly put a "curse" on the excessive hype in the NFT market.

In fact, it is not uncommon to speculate on private transactions of digital collections. On April 14, a reporter from Securities Daily tried to search for "digital collections" on a second-hand trading platform and found many private transaction sellers. , some digital collections are even priced at thousands of yuan. The reporter tried to contact a seller and found that it was ultimately necessary to change platforms and conduct private transactions, but private transactions often carry greater risks of fraud.

In addition, the reporter noticed that Ant Whale Explorer and WeChat had previously increased penalties for violations related to the digital collection platform.

On March 21, Ant Chain’s Whale Detective issued a penalty announcement for users who violated regulations, which showed that the illegal accounts would be punished in a step-by-step manner based on the severity of the violation, including permanent restrictions on the transfer of collections, account bans, etc. According to incomplete statistics from a reporter from Securities Daily, Ant Chain Whale Detective has processed more than 180 illegal accounts (permanent bans on acquisition and transfer functions).

Whaletan told the Securities Daily: At the beginning of our business, we clearly opposed the financial productization of digital collections and strengthened real-name authentication, risk control and other technical means to ensure that users can normally transfer collections to friends. At the same time, we will resist all forms of potential hype risks, including continuing to manage irregular users who commit serious violations and cheating, and provide anti-fraud reminders.

According to the instructions for re-donation of Whale Explorer, the official does not support any form of re-sale of digital collections. Users who have purchased digital collections for 180 days can initiate transfers to other real-name users. To prevent speculation, the recipient can initiate transfers again after receiving the digital collections for 2 years.

At the end of March, WeChat banned a number of public accounts of digital collection platforms on a large scale, involving more than ten platforms, all of which were small and medium-sized digital collection platforms. WeChat told a reporter from Securities Daily that it currently only provides public accounts for digital collection display and first-level transactions. It requires proof of cooperation with a blockchain company that has been registered and approved by the Cyberspace Administration of China as proof of qualifications. It does not support the provision of second-level accounts. level transactions.

In addition, the mini program currently only supports digital collection display and first-level gifting. Digital collection transactions and multi-level circulation are not open to the public. If any countermeasures such as bypass are discovered, Capabilities will be banned or removed based on the degree of violation.

WeChat emphasized that it will pay close attention to industry trends and relevant regulations in the future, and further improve and adjust the rules.

Sun Yulin, a senior researcher at Ouke Cloud Chain Research Institute, told Securities Daily, “Combined with the fact that a large number of public accounts and small programs involving digital collections and illegal accounts have been blocked, and this time the three associations initiated Released, it is predicted that supervision in this field will gradually tighten in the future, and compliance requirements for digital collection platforms will become increasingly stringent. ”