China NFT Weekly: WeChat Bans NFT Accounts

Digestible news on the latest developments across the fields of Web3, NFTs, blockchain, and metaverse in China and beyond, compiled for you every week by Pandaily.

This week: WeChat bans NFT-related accounts, Chinese state media warns Bitcoin price is heading to zero, Hong Kong crypto platforms suspend withdrawals amid global crypto sell-off, and more.

WeChat Bans NFT-Related Accounts

WeChat, China’s most popular social media platform with over 1.2 billion monthly active users, has updated its policies to ban accounts providing access to crypto or NFT-related services. Cointelegraph and CoinDesk first reported this story.

  • The new guidelines will restrict or ban the issuance, trade, and financing of crypto and NFTs as these activities are now viewed as illegal.
  • The new policy also covers secondary NFT trading, stipulating that “accounts that provide services or content related to the secondary transaction of digital collections shall be dealt with in accordance with this article.”
  • Regarding punitive measures, the policy states that “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.”
  • While there are still regulatory uncertainties as to whether NFTs are entirely illegal in China, companies generally steer clear of secondary trading to avoid potential compliance issues.
  • NFTs are known officially as digital collectibles in China and can be purchased in fiat. (Cointelegraph, CoinDesk)

READ MORE: Bitcoin Drops Sharply as Chinas Crackdown on Crypto Mining Expands

Ex-Huobi Manager Accused of Illicit Trading

A former senior manager at Huobi is being prosecuted in Hong Kong following accusations that he made $5 million through illicit trading. The story was first covered by The Financial Times.

  • Chen Boliang, an ex-senior manager of institutional clients at Huobi, allegedly made $5 million after setting up a retail account in his father’s name.
  • The claims against Chen come as a lack of regulation in the crypto market has led to increasing compliance issues.
  • Chen’s case is set for a preliminary inquiry before a magistrate next week.
  • Chen, 34, was arrested in May 2020 and has been charged with accessing Huobi’s computer systems with criminal or dishonest intent. He is out on a $25,000 bail.
  • Huobi is one of the world’s largest crypto exchanges with a trading volume of around $1 billion as of March 2018.
  • Following a 2017 ban on Bitcoin exchanges and initial coin offerings (ICO) by the Chinese government, Huobi stopped Bitcoin withdrawals in the country, but continues to operate as a blockchain consulting and research platform.
  • It has also expanded internationally, setting up global headquarters in Seoul, South Korea in 2018. (Financial Times)

Poster Image of Hong Kong Film Star Appropriated by Mainland Chinese NFT Platform

Master Kingdom, a talent agency representing Hong Kong actor Louis Koo Tin-lok, said Lianwan, a mainland Chinese NFT platform, used the film star’s image for marketing purposes without authorization. The South China Morning Post first reported this story.

  • According to Master Kingdom, Lianwan displayed images of G Storm, a 2021 crime thriller starring Koo, and claimed that the platform was collaborating with the 51-year-old actor. However, Koo was not associated with the platform in any way.
  • Master Kingdom said they would investigate the incident and take legal action if necessary.
  • Lianwan responded by saying that their use of the images was authorized by Anhui Lianmei, a creative agency. However, Mandarin Motion Pictures, the film’s copyright owner, and China Huace, its distributor, issued a joint statement on Weibo saying that that they did not give any permission to either Anhui Lianmei or Lianwan.
  • Lianwan ended up apologizing on Weibo this week and removed the images.
  • The enthusiasm for crypto-backed digital assets continues to run high in China despite a global crypto crash that has seen the price of Bitcoin drop below $20,000 at its lowest point.
  • The Chinese government banned all crypto mining and trading in September last year, but owning NFTs is not illegal. (SCMP)

Hong Kong Crypto Platforms Freeze Accounts Amid Market Meltdown

Several Hong Kong cryptocurrency platforms have temporarily suspended client withdrawals amid a market meltdown that saw the price of Bitcoin plunge by over 50%. Nikkei Asia first reported this story.

  • Crypto trading exchange announced on Sunday that it would suspend all transactions after being hit by a heavy volume of redemption requests, just days after Singapore-based crypto hedge fund Three Arrows Capital (3AC) collapsed.
  • 3AC, a Dubai-based investment firm, was dissolved by crypto lending firms and is currently repaying lenders and other counterparties.
  • Hoo later announced that it would restart transactions in three days in order to “process a large number of users’ withdrawal demands and ensure the safety and accuracy of withdrawal assets.”
  • Founded in 2017, Hoo is registered in the Cayman Islands, a popular tax haven for American elites and large multinational corporations.
  • Hoo’s announcement came in the wake of Babel Finance’s decision to suspend withdrawals, citing “unusual liquidity pressures” and volatility. Babel Finance is a Hong Kong-based crypto lender. Last month, it raised $80 million in Series B funding.
  • Hong Kong-based savings platform Finblox also said that it would limit daily withdrawals and put the registration of new users on hold. The company is backed by Sequoia Capital.
  • US-based Celsius Network, the world’s second-largest crypto lender, also said it would pause all withdrawals as it faced rumors of insolvency. (Nikkei Asia)

READ MORE: Web3 Investors Unfazed by Market Slide

Chinese State Media Warns Bitcoin Is Heading to Zero

Economic Daily, a Chinese national newspaper and government mouthpiece, warned its readers that the price of Bitcoin is “heading to zero.” The South China Morning Post and Cointelegraph first reported this story.

  • The state-backed media outlet accused the West of creating a highly-leveraged market that is “full of manipulation and pseudo-technology concepts,” which it said was “an important external factor” that made the price of Bitcoin extremely volatile.
  • “Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high,” the newspaper emphasized.
  • China has banned crypto mining and trading since last September, launching in its place the “e-CNY,” a digital fiat currency controlled by the country’s central bank.
  • The Chinese government is not alone in making predictions about Bitcoin’s demise. Last week, Tom Demark, the founder and CEO of market analysis firm DeMark Analytics told Marketwatch that he believes the price of Bitcoin is likely to remain low for a prolonged period of time.
  • “Such breakdowns bespeak a high probability that recovery to the all-time Bitcoin highs will require many years, if not decades, to accomplish,” he said.
  • In contrast to Beijing’s warnings, the Bank of England (BoE) is optimistic that crypto is here to stay. “Whatever happens over the next few months to crypto assets, I expect crypto technology and finance to continue. It has the possibility of huge efficiencies and changes in market structure.” (Cointelegraph, SCMP)

KPMG Makes Foray Into Metaverse

KPMG, a leading consultancy offering services in financial auditing, taxes, and advisory, is hopping on the metaverse bandwagon with the launch of its first collaboration hub across its US and Canadian units. CoinDesk first reported this story.

  • The hub will allow the firm’s employees, clients and communities to connect and explore growth opportunities across industries and sectors, the consulting firm said in a statement.
  • “The metaverse is a market opportunity, a way to re-engage talent and a path to connect people across the globe through a new collaborative experience,” said Laura Newinski, deputy chair and chief operating officer at KPMG in the US.
  • “The metaverse is a $13 trillion market opportunity that could boast as many as 5 billion users by 2030,” said Armughan Ahmad, the president and managing partner of digital at KPMG in Canada.
  • KPMG is one of the latest professional services giants to make its foray into the metaverse. Last year, the Hong Kong branch of PwC, another leading global consultancy, said it had purchased an imaginary plot of land (LAND) in The Sandbox metaverse, for a fee of over $10,000. (CoinDesk)

That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how to make this newsletter better. Write to us at See you again next week!

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