Although the long-term legal status of NFTs in China remains somewhat unclear, this has not stopped companies from successfully using NFTs in marketing campaigns, seemingly without legal problems. Recently, Tmall hosted an online event called the Metaverse Environmental Protection Auto Show, which promoted the launch of eight electric vehicle brands, with users able to obtain NFTs of these brands through lottery as part of the promotion. McDonald`s also ran an NFT promotion where customers could use points from the Maimaikazi (麦麦咔滋脆鸡腿堡) chicken thigh burger to redeem a related NFT via the McDonald`s app, WeChat, and Alipay. But he also had big ideas about how Twitter should work, including drastically reducing the company`s terms of service. As Döpfner described in messages to Musk, Twitter users should only be banned from spamming or defrauding users, promoting violence, or posting “illegal pornography.” He told Musk that Twitter should be “the backbone of free speech.” (Disclosure: Axel Springer owns Protocol). Asked about crypto companies that have defied or simply ignored OFAC`s rule, Allaire joked, “I can`t comment on their legal bills or anything else.” If, the Shanghai-based lawyer, warns that an Ethereum-based approach will expose companies to more risk than the approach of Alibaba and Tencent. “The main hurdle will be regulatory compliance. [Companies] have to be very careful,” he said. This entry has been created for information and planning purposes. This is not legal advice and should not be replaced on the basis of specific facts. Although their declarations have no legal validity, industry associations in China issue standards and self-regulatory statements that can be a precursor or substitute for government regulation. China`s legal market for “digital collectibles” is booming: metaverse-focused news platform Gyroscope Finance estimates that there are 681 NFT trading platforms in China as of June and that 100 new platforms have been set up every month since March. But by and large, “NFTs” in China are not developed under the premise of a free market.
It`s more like digital art, which is easy to buy but hard to sell,” said Peng Chi, a Chinese visual artist who has used technology for his work. Of course, this is not guaranteed. Although NFT-specific regulations have not yet been promulgated in China, the risk of this happening is high. “Blockchain, telecommunications, cryptocurrency, art auctions: there are strict national regulations every step of the way. I believe the government will take action as soon as illegal practices emerge,” said attorney Jay Si. On the legal side, the American Semiconductor Chip Protection Act of 1984 provides legal protection for chip topography and intellectual property design, while the legal protection of topographies of semiconductor products of 1986 protects the design of EU integrated circuits. These regulations “have encouraged companies to continue to innovate,” according to Qualcomm and Accenture`s report, Harnessing the Power of the Semiconductor Value Chain. A high-quality patent portfolio also helps companies develop their ecosystem if they decide to license, through advice, training, go-to-market support, assistance in expanding into new markets, etc. On April 13, 2022, industry associations such as the National Internet Finance Association of China, the China Banking Association, and the Securities Association of China jointly released the Proposals to Avoid NFT-Related Financial Risks (the Proposals), which set out some basic principles for NFT-related enterprises, with a focus on rejecting attempts to financialize or securitize NFTs. While these industry associations are not state regulators and the proposals have no legal effect, the proposals can be viewed as a “water test” and inform future legislative direction.
With this in mind, brands may still be able to successfully use NFTs in their promotions in China, but should exercise caution. Global approaches to NFTs will not work and could be illegal, even if China`s unique NFT ecosystem offers new creative marketing opportunities.