Tencent Backs Out from NFT Market in China due to Regulatory Concerns
Amid regulatory scrutiny, Tencent would no longer offer new digital collectibles on its NFT platform Huanhe. Existing customers can choose to hold, display, or request a refund for their digital assets.
Tencent halted NFT sales on its Huanhe platform
Chinese internet giant Tencent announced on August 16th that it would no longer release new NFTs on its Huanhe platform. The move came in view of mounting regulatory scrutiny of NFTs in China.
According to Tencent, the company's Huanhe NFT platform, which hit the scene in August last year, will no longer sell new NFTs starting from Tuesday. Even so, those who own existing collectibles will still be able to hold, display, or request a refund for their digital assets.
"Based on the company's consideration to focus on its core strategy, Huanhe is making adjustments to its business," Tencent said in a statement.
To start off, Huanhe is one of the biggest NFT platforms in China, with new collectibles often sold out instantly upon launch. But given how frequently the state media highlighted issues around NFT speculation, Tencent's latest decision came as little surprise to those who dabble in the space.
In June, tech giants including Tencent and Ant Group signed a pact to stop the secondary trading of digital collectibles. This was done to reduce rampant speculations in the Chinese NFT market. Despite that, it didn't help much as the Chinese media reported a potential shutdown of Huanhe last month. With the latest move by Tencent, the firm will likely suspend its entire NFT operation soon.
Tencent's management probably saw it coming too given the country's regular crackdowns on crypto-related assets. Last month, Weibo's chairman Liu Jiaming left the company for "personal reasons" to join Animoca Brands as the new Chief Business Officer.
Although crypto trading and mining are considered illegal in China, the authorities seem to have no issues splurging on metaverse and blockchain developments. In July, the Shanghai municipal government published a policy paper outlining plans to build a $52 billion metaverse cluster by 2025.