Non-fungible tokens, often known as NFTs, have been found by a court in the Chinese city of Hangzhou to be virtual property covered by the People’s Republic of China’s legal system.
The decision was made in a case involving a disagreement between a consumer and a platform used to sell a group of tokens.
Internet Court in Hangzhou Hears Case Regarding NFT Property Rights
In a case involving a customer and a local digital art platform that refused to complete a sale of NFTs on his behalf, a court in Hangzhou, the capital of the eastern Chinese province of Zhejiang, has looked into the matter.
The Hangzhou Internet Court ruled that while digital collectibles are virtual properties, NFT collections exhibit features of property rights, such as value, scarcity, controllability, and tradability.
According to the court’s further explanation, “an NFT digital collection itself, as a virtual artwork, condenses the creator’s unique expression of art and bears the value of relevant intellectual property rights.
The Hangzhou court came to the conclusion that NFT collections fall under the heading of virtual property.
Additionally, it stated that the transaction in question exemplifies the commercial activity of online sales of digital goods, making it a part of e-commerce activities and deserving of regulation as such under China’s “E-commerce Law.”
The issuing, trading, and mining of digital currencies like bitcoin were all subject to a broad crackdown on cryptocurrency-related activity by the Chinese government last year.