China’s Tencent Holdings plans to shut down its non-fungible token (NFT) platform Huanhe just a year after launch. The social media giant is said to have made the decision due to the strict NFT resale ban imposed by authorities in Beijing.
Huanhe to shut down a year after launch as China curbs NFT resale
Shenzhen-headquartered tech conglomerate Tencent is preparing to shut down its NFT platform as early as this week, according to a report by Chinese media outlet Jiemian, quoted by the South China Morning Post. The move comes amid restrictions on secondary trading of NFTs in the People’s Republic, which have reportedly hurt the platform’s trading potential.
Jemian cites unidentified Tencent sources, but the company refrained from providing an official comment on the matter. Huanhe, which issues and distributes blockchain-based digital collectibles, was launched just over a year ago.
All NFTs in the app are already marked as “sold out”, although users can still visit augmented reality art exhibits. Another report quoting another Tencent source, from state media Yicai Global, reveals that trading came to a halt in early July in anticipation of a crackdown.
Huanhe was developed by Tencent’s Platform and Content Group (PCG), which was hit hard by layoffs earlier this year. If the NFT unit goes out of business, it would mark a major exit for Tencent from the digital collectibles market, SCMP notes.
In June, Tencent’s social media app Wechat announcement its intentions to ban public accounts facilitating secondary trading or offering advice for non-fungible tokens. A little later, the Tencent News app stopped selling NFTs.
Other Chinese tech giants, such as Alibaba Group Holding, have been cautious in their involvement with NFTs, with Chinese platforms generally replacing the NFT label with the term “digital collectibles”, which does not is not necessarily associated with cryptocurrencies.
The mainland government has cracked down on crypto-related activities, including investing, trading, and mining. He highlighted concerns that speculation could lead to bubbles in the digital asset market, while promoting state-issued issues digital yuan. According to current regulations, tokens can only be purchased with Chinese fiat and never resold.
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