The crypto regulatory stalemate in China has shown some light signs of ending after a Chinese court classified NFTs as virtual property. There has been a lot of speculation surrounding NFTs since the country dictated its unfavorable stance against general cryptocurrencies.
Chinese Court Classifies NFTs As Virtual Property
But interestingly, a Chinese court in the city of Hangzhou has issued a ruling reflecting some optimism about digital assets in the country. On November 29, the court established non-fungible tokens as virtual property that the country’s law must protect.
Established in 2017, Hangzhou Internet Court is an arm of special jurisdiction in China that determines internet-related matters such as contract disputes involving online shopping, services, and copyright infringement.
In a recent determination, the court has classified NFTs as object characteristics of property rights that the country’s laws should protect. Nonetheless, the court admitted that currently, there is no legal definition of NFTs in the country’s laws.
The Hangzhou Internet Court made the recent ruling following a legal tussle between an anonymous tech user and an unidentified tech platform. The user accused the tech firm of refusing to complete the sale and canceling their purchases of NFTs.
On the other hand, the tech firm defended itself, citing that the contact details the plaintiff provided did not match the original information. In its jurisdiction, the court acknowledged the characteristic of NFTs and ruled that they possess the value of an intellectual property.
In that context, trading NFTs can be considered the “selling of digital assets through the internet” under the new ruling. According to the court, NFTs fall under the E-commerce business and should therefore be regulated under E-commerce laws.
More States Rule On NFTs
In the meantime, China’s Hangzhou Internet Court is not the first jurisdiction to classify NFTs under property and E-commerce laws. In October, a Singaporean High Court ruled that NFTs fall under existing property laws, relating them to physical property, such as luxury watches and fine wine.
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