China to Recognize NFT Theft as Property Crime

The Chinese government has come out with directions on the legal treatment of digital collection theft, including Non-Fungible Tokens (NFTs). This move is a clear indication of China’s evolving stance on digital asset regulation. As of Nov. 10, the government has classified such thefts under property crimes, a significant shift from its previously rigid regulatory framework.

In a detailed statement, the government outlined three viewpoints on how to categorize the theft of digital collections. While the first two perspectives consider it either as data theft or digital property theft, the third, more encompassing view, treats these thefts as both data and virtual property crimes, falling under the category of “co-offending.”

The statement stresses that the theft of digital collections breaches laws that protect computer information system data and virtual property rights. This perspective acknowledges the complexity of digital asset theft, involving unauthorized access to computer systems and the theft of virtual property.

By labeling digital collections as “network virtual property,” the Chinese government recognizes them as valid property within criminal law. This designation is a significant development, suggesting that digital collections, including NFTs, are now subject to property crime laws.

There has been growing interest in NFTs within China. In January China launched state-run NFT marketplace, operated by three state-owned and commercial enterprises, including China Technology Exchange and Art Exhibitions China, all of which are government-backed entities. Moreover, on October 6, state-run China Daily announced its intention to develop an NFT platform, investing 2.813 million yuan (approximately $400,000) in its creation.

Despite China’s ban on most cryptocurrency-related activities in 2021, this recent development suggests a more nuanced approach to digital assets like NFTs. This is especially interesting given the global origins of NFT technology, which employs blockchain to create unique, secure, and permanent digital assets.