WeChat targets NFT and crypto accounts with new policy update

In a recent policy update, China’s top social media platform WeChat has moved to ban all accounts that provide access to crypto or NFT-related services.

According to the new guidelines, all public accounts on its platform involved with the issuance, trading, and financing of crypto and NFTs will henceforth fall under the “illegal business” category and will either be restricted or outrightly banned. The policy states that:

Accounts that provide services or content related to the secondary transaction of digital collections shall also be dealt with in accordance with this article. […] Once such breaches are identified, the WeChat public platform will depend on the severity of the violations, instruct the violating official accounts to rectify within a time limit and restrict some features of the account until the permanent account is banned.

Targeted accounts include those of exchange businesses between virtual and fiat currency or between cryptocurrencies, those that provide information, mediation, and pricing services for crypto transactions, as well as accounts involving token issuance financing and cryptocurrency derivatives trading.

Hong Kong-based crypto news reporter Colin Wu of Wu Blockchain publicized the move on Monday, highlighting the significance of the action given WeChat’s over 1.1 billion daily users in China.

The ban comes at a time when Chinese firms are seeking to comply with Beijing’s decree against speculative activity in NFTs.

The Chinese government implemented a phased ban on the local crypto sector between May and September last year and judging by the timing of the WeChat policy amendment, the platform may have allowed some crypto activity to go undiscovered since then.

Interestingly, there is still a regulatory grey area in the country regarding NFTs as the assets can be purchased via fiat currency.

Meanwhile, most organizations and platforms already prohibit secondary trading to prevent potential regulatory difficulties related to the finance in technology.  Since March, popular platforms like WeChat and the Ant group-owned WhaleTalk have distanced themselves from the technology, purportedly eliminating or banning NFT services from their networks due to a lack of regulatory clarity and fear of a Beijing crackdown.

Generally, officials in the country have maintained an anti-crypto stance, with the China Banking Association, the China Internet Finance Association, and the Securities Association of China issuing a joint statement in April enlightening the public about the “hidden risks” of investing in the assets.

While the sentiments around digital currencies have largely died down in China, with most prominent exchanges closing up shop in the country, the latest crackdown on NFTs by WeChat will further dim the prospects of China regaining the top spot as the world power in anything related to digital assets.

Ironically, data presented by a local media report from Thursday revealed that the number of digital collectible platforms in China has grown to over 500, a five-time increase since February 2022.