Chinese tech giant Tencent has reportedly closed down one of its two non-fungible token (NFT) marketplaces on July 1. A report from a local daily indicates that the wind-down process for it began in May. The tech giant transferred the key executives responsible for managing the NFT platform in the last week of May and completely removed the digital collectible section from its Tencent News app by the first week of July. The primary reason for the move is the government's strict policies that prohibit one to sell their digital collectibles on the secondary market after purchase.
According to a report by Blue Whale Finance, the tech giant finally shut down its NFT platform completely on July 1. Meanwhile, one of the executives who were transferred in May is former Tencent News head Wang Shimu. Shimu was shifted to Tencent Platform and Content Group (PCG) where he's in charge of managing other platforms including Magic Core – Tencent's other NFT trading platform.
> Tencent, China's largest internet company, has shut down one of its digital collection (NFT) platforms, and another platform is not doing well. The reason is that the Chinese government does not allow users to conduct private transactions after purchasing.https://t.co/VYWS3TxKUF
> > — Wu Blockchain (@WuBlockchain) July 14, 2022
After predicting a possible crackdown, a host of social media giants such as Weibo, WeChat, and Alibaba have ended up their digital collectibles businesses by removing featured content from their platforms.
The news arrives within weeks of one of the China's most popular instant messaging and calling apps, WeChat banning crypto-related accounts on its platform. Accounts that issue, trade, and finance crypto and NFTs have been restricted under the new rules, as per WeChat, and will be classified as ‘illegal business'. Section 3.24 in the updated WeChat 'Code of Conduct' declares that any account involved in the issuance, trading, or financing of digital currency will face consequences, with the possibility of a permanent ban.
Although NFTs were largely left alone by Chinese regulatory bodies in the past, a recent report by China Times via CryptoPotato indicates that the amount of such platforms in the country has grown from about 100 to over 500 in 2022 alone.
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