The Chinese court clarified that NFT is a "virtual property" and protected as an intellectual property right

Dec 08,2022
The Chinese court clarified that NFT is a

A court in Zhejiang Province in eastern China said that irreplaceable token collections should be classified as "virtual property" and protected by the national e-commerce law. The court ruled that the irreplaceable token (NFT) represents the virtual property protected by the laws of the People's Republic of China. This decision was made in the case of a sales dispute between a platform customer and a collection.

Hangzhou Internet Court heard NFT property dispute case

According to the domestic media on Monday, citing the court's review judgment, the Hangzhou Internet Court called NFT digital collections "virtual works of art", saying that they express the original expression of the creators and should be regarded as relevant intellectual property rights.

Hangzhou, the capital of Zhejiang Province in eastern China, heard about the dispute between customers of the local digital art platform and customers who cancelled NFT sales on his behalf. The user sued the company, claiming that the operation ended without his consent.

The platform issued a refund explaining that it had to do so because the plaintiff's personal information was inaccurate. The announcement explained that according to the platform's "know your customer" policy, orders without real name certification must be cancelled.

Hangzhou Internet Court said that NFT collections belong to property rights.

They are valuable, scarce, controllable and tradable. However, digital collections are virtual property. The statement is as follows: quoting Colin Wu (also known as "Wu Blockchain" on Twitter), a Chinese cryptocurrency reporter, the judicial authority also emphasized that the contract in this case does not violate any laws and regulations of China. It also does not violate the actual policy and regulatory guidance to avoid economic and financial risks. This should be protected by law.

The court further elaborated that "as virtual works of art, NFT digital collections themselves embody the creators' original expression of art and have the value of relevant intellectual property rights. At the same time, NFT digital collections are unique digital assets formed on the blockchain based on the trust and consensus mechanism between blockchain nodes."

Accordingly, the Hangzhou court ruled that the NFT collection belongs to virtual property. He also said that the transaction in this case belongs to the business activity of selling digital goods through the Internet and belongs to e-commerce activities, which should be regulated in accordance with China's Electronic Commerce Law.

The Chinese government launched a crackdown on encryption related activities such as the issuance, trading and mining of Bitcoin last year. Although NFT can be issued, regulators try to curb speculation. To avoid being associated with encrypted spaces, they are often referred to as "digital collections" rather than "irreplaceable tokens".


It is reported that WeChat, a popular messaging application in China, is suspending accounts associated with NFT. In September, it was revealed that the National Copyright Administration of China launched a special action to combat copyright infringement and piracy through digital collections. Wang Peng, a researcher at the Beijing Academy of Social Sciences, told the domestic media that both the Personal Information Protection Law and the Network Security Law have provisions for protecting virtual property and personal information. However, he said that with the development of NFT blockchain technology, new problems will arise, and the legislature should continue to repair the legal system and build a solid protection network.