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Tencent, a Chinese Tech Giant, Shuts Down NFT Platform amid Trading Restrictions

Chinese Tech Giant Tencent to Shut Down NFT Platform Amid Trading Restrictions

China’s Tencent Holdings plans to shut down its non-fungible token (NFT) platform Huanhe only a year after its launch. According to reports, the social media giant made this decision due to the Beijing authorities’ strict ban on resale NFTs.

Huanhe to Close Down a Year After Launch as China Curbs NFT reselling

Shenzhen-headquartered technology conglomerate Tencent is preparing to shut down its NFT platform as early as this week, according to a report by Chinese media outlet Jiemian, quoted by the South China Morning Post. This is due to restrictions in the People’s Republic on secondary trading of NFTs, which may have affected the platform’s business potential.

Jiemian cites unidentified sources from Tencent, but the company has yet to comment. Huanhe is a digital collectibles company that issues and distributes crypto-based digital collectibles. It was founded just one year ago.

All NFTs in the app have been marked “sold out” although users can still view augmented reality art exhibits. A different Tencent source, citing the state-owned media Yicai Global, reports that trading was stopped in July due to a crackdown.

Huanhe is a Tencent Platform and Content Group (PCG) product. It was hard hit by layoffs in the earlier part of this year. The SCMP notes that if the NFT unit ceases to exist, it would be a significant retreat by Tencent in the digital collectibles market.

In June, Tencent’s social media app Wechat announced its intentions to prohibit public accounts facilitating secondary trading or offering guidance for non-fungible tokens. The Tencent News app stopped selling NFTs a little later.

Other Chinese tech titans like Alibaba Group Holding have been cautious with their involvement in NFTs. Chinese platforms often substitute the NFT label for the term “digital collectors,” which isn’t necessarily associated with cryptocurrency.

The government on the mainland has been pursuing crypto-related activities including trading and investment. It has highlighted concerns that speculation could lead to bubbles in the digital assets market, while promoting the state-issued digital yuan. The existing regulations state that the tokens cannot be bought with Chinese fiat, and they can never be resold.

Do you expect other NFT platforms in China to shut down in the near future? Let us know in the comments below.

Lubomir Tassev



Image Credits: Shutterstock, Pixabay, Wiki Commons

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