According to China’s State Administration for Market Regulation, complaints related to non-fungible tokens (NFTs) experienced a massive increase of 30,000% in 2022.
The regulator reported that last year, there were 59,700 complaints from individuals who were negatively impacted by investing in these digital collectible tokens.
This is in stark contrast to 2021 when only 198 complaints were recorded and 2020 when there were no complaints at all.
The complaints centered around price manipulation, difficulty in receiving the product after payment, high transaction fees, and refund issues.
The lack of regulation in the NFT industry, despite China’s ban on cryptocurrencies, has contributed to the significant increase in these complaints.
Although many tech giants are looking to capitalize on the potential of digital collectibles in the Chinese NFT market, the sector remains a “grey area” in the country.
The State Administration believes it is essential to raise consumer awareness and take measures to protect their interests.
Member of the Chinese Parliament, Feng Qiya, is also proposing regulations for collectible tokens, including a nationwide ban on using NFTs as securities or financial instruments.
It is worth noting that at the end of last year, a court in Hangzhou recognized NFTs as virtual property, setting a possible precedent for future litigation.