December 8, 2022
By Sharan Kaur Phillora
The Hangzhou Internet Court – a specialist internet court – has ruled that non-fungible tokens (NFT) are virtual properties protected by law, according to the court’s summary of a recent case posted on its official Wechat account on Nov. 29.
Here’s what we know:
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 cancelling their purchases of NFTs.
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.
The Chinese court stated, “The sale contract of the NFT does not violate the Chinese laws, nor does it violate regulatory guidance in China to prevent financial risks, so Chinese laws should protect it.”
The court added “NFT is a unique digital asset on the blockchain based on trust and consensus mechanisms among blockchain nodes. Therefore, NFT falls into the category of virtual property.”
The transaction in the legal dispute is viewed as the selling of digital goods through the internet, and the digital art-based platform is handled as an e-commerce firm and regulated under the e-commerce Law, the court stated.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.