Xiao Sa: Analysis of the recent domestic and foreign NFT regulatory trends
Original Title: "Sister Sa's Team | Domestic & Foreign, Analysis of Recent NFT Supervision Trends"
Original author: Xiao Sa lawyer
my country's laws and regulations have always held a cautious attitude towards blockchain, virtual currency, digital collections and other related fields. In 2021, NFT will be popular in the world and continue to develop rapidly, and domestic major manufacturers and rookies will also embark on the "track" at the same time.
Although each platform has different ways of playing NFT, since the creation of NFT, it has not been able to disassociate itself from the word "finance". The U.S. Securities and Exchange Commission believes that if NFTs are provided to the public with the promise of liquidity and that the issuer will provide other services to increase the value of NFTs, such NFTs may be deemed to be investment in nature, but only covered A coat of virtual attributes, so as to further identify it as a security. Because of this, after the rapid expansion of NFT in 2021, the regulation of it has become an imminent matter.
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Foreign regulatory attitudes and measures towards NFT
Recently, according to Bloomberg News, the US Securities and Exchange Commission is concerned that NFT may be used for unregulated security token issuance. Over the past few months, the SEC has issued subpoenas to creators of NFTs and to various crypto companies and exchanges seeking more information about specific NFTs and some other token offerings. As with encrypted assets, the SEC's main concern is whether NFTs can be classified and regulated as securities? This move is intended to guarantee that the NFT market will abide by its rules. In addition, in early February this year, the U.S. Department of the Treasury released "Research on Money Laundering and Terrorist Financing Through Art Transactions." The report classified NFT as an emerging online art market, clearly pointing out that there are money laundering risks in the field of digital art.
From an EU regulatory perspective, NFTs may fall into any category of the Markets in Crypto Assets Regulation (MiCA) proposal, which aims to provide comprehensive regulation of encrypted assets not yet covered by EU financial law. Therefore, both issuers and service providers of NFTs will be subject to the MiCA proposal. The latest MiCA draft mentions that certain NFTs should not be considered unique and non-homogeneous, so such NFTs will also be subject to MiCA. The draft also states that if NFT holders or their creators have specific rights (such as profit rights or other rights) related to financial instruments, the proposed regulations should also expressly apply. In this case, such NFTs would be assessed as assets in the category of “Securities Tokens”.
South Korea’s Financial Supervisory Service is also concerned about the risks of NFTs. In February this year, it proposed to strengthen the inspection of IPOs of emerging market companies such as NFTs and Metaverse, and will target consumers in the rapidly growing digital asset market. factors to formulate countermeasures.
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The Road to NFT Supervision in my country
At present, although my country has not given specific regulations on NFT in terms of policy, in the reality of the explosive growth of NFT, supervision and compliance are an inevitable problem that cannot be bypassed. In the past 2021, various institutions and enterprises have begun to establish relevant standards for NFT.
In September 2021, the Standardization Working Committee of the China Technology Market Association under the Ministry of Science and Technology and several organizations set up a special working group to jointly carry out the development and drafting of the "NFT Platform and Product Evaluation" group standard. It aims to establish a set of relevant group standards that suit China's national conditions and meet the long-term and healthy development needs of the domestic NFT industry.
In October 2021, the first self-regulatory convention in the NFT industry was released. The National Copyright Trading Center Alliance, the China Academy of Art, the Hangzhou Internet Notary Office of Zhejiang Province, and domestic leading Internet companies jointly issued the "Digital Cultural and Creative Industry Self-Discipline Convention".
The formulation of these industry standards will provide a certain reference value for the formulation of NFT-related regulatory measures in the near future.
In the "two sessions" that are being held, some representatives also proposed that the supervision of the digital collection industry should be strengthened. The specific content mainly includes the following aspects:
Effectively supervise the issuance of digital collections. Due to the similarities between digital collections and traditional publications, limited edition souvenirs and other products, it is recommended that relevant departments formulate management measures for the issuance of digital collections, supervise the release of illegal and bad digital collections, and further cultivate and strengthen mainstream awareness in the digital environment Form a digital collection creation group, promote the positive growth of digital collection creation, and disseminate excellent Chinese cultural content.
Effectively supervise the issuance of digital collections. Due to the similarities between digital collections and traditional publications, limited edition souvenirs and other products, it is recommended that relevant departments formulate management measures for the issuance of digital collections, supervise the release of illegal and bad digital collections, and further cultivate and strengthen mainstream awareness in the digital environment Form a digital collection creation group, promote the positive growth of digital collection creation, and disseminate excellent Chinese cultural content.
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In short, the regulatory system in my country's NFT field is not perfect, but the market is already in a state of "in full swing". In response to this phenomenon, we expect that the relevant departments will make corresponding regulatory plans based on the research and judgment of technological trends, so that the rule system can keep up with the pace of technological development. We also expect that the future domestic NFT operation mechanism, rights and obligations will gradually clear.
