The Court claims that the NFTs exhibit value, scarcity, controllability, and readability.
The Hearing in Hangzhou
The Hangzhou Court (1) in China argued that because NFTs had qualities associated with property rights, such as value, scarcity, disability, and readability, they must be protected by the law. A court with unique jurisdiction that specializes in internet-related cases is the Hangzhou Internet Court. Late in November, the Court heard a case that demanded NFT restrictions. Both sides of the hearing were represented by the Hangzhou Digital Technology Company, which operates an NFT marketplace and a platform user. Even after meeting all the conditions, the user claimed they never received the NFT they had paid. The customer allegedly received a reimbursement from the business in transferring the acquired NFT.
The user sued the corporation, demanding that it either provide the NFT or pay him 99,999 yuan ($14,368) as compensation for the financial injury the company allegedly caused him by failing to uphold their half of the contract. In response, the business claimed that they could not enable the transfer because the data the user gave at the time of purchase was incongruous. Because the transaction included NFT digital collections rather than NFT rights certificates, the Hangzhou Internet Court ruled with the user. The judge declared:
The object properties of property rights, such as value, scarcity, disability, and tradability, apply to NFT digital collections. Additionally, they are virtual network properties and have the distinctive qualities of network virtuality and technology. The agreement does not contravene our nation's rules and regulations or the sensible regulatory and policy framework that our nation has established to reduce economic and financial risks; thus, it should be protected by our laws.
China's position on Crypto
China has a reputation for being anti-crypto. Due to its stringent rules, the nation prohibited cryptocurrency mining in 2021, and many industry leaders left. Crypto aficionados have pushed for reform, nevertheless. To challenge the dominance of the U.S. dollar in the area, experts sponsored by China urged the creation of a pan-Asian digital currency in October (2). China still has all the cryptocurrency it seized, amounting to $3.9 billion, it was disclosed in November.