The Chinese government has officially acknowledged the illicit act of non-fungible token (NFT) theft, categorizing it as a criminal offense akin to other illegal activities.
The acknowledgment, outlined in a testament released on November 10, addresses the growing popularity of NFTs and the corresponding increase in fraudulent activities within this domain.
Several instances of NFT platform account compromises leading to the theft of digital collectibles have been reported in China, prompting the government to prioritize user protection and overall security within this burgeoning sector.
According to the testament, existing legal perspectives offer three distinct views on the nature of crimes involving the theft of digital collections.
The first view considers digital collections as “electronic data within computer information systems,” falling under the purview of cybercrime regulations.
The second perspective defines digital collections as “virtual property in a networked environment,” suggesting an identification method based on property crime criteria.
The third viewpoint posits that digital collections encompass both data and virtual property, warranting consideration within the realms of both imaginary competition and cooperation. This means that individuals who steal digital collections through hacking or other technical means could be charged with the illegal acquisition of computer information system data and theft simultaneously.
Given the dual attributes of digital collectibles — technical characteristics as NFTs and legal nature as online virtual property — the testament underscores the importance of considering these aspects in sentencing.
Furthermore, recognizing the varying values of digital collections, the document outlines separate provisions for sentencing levels, aligning with the principle of proportional crime and punishment.
This development reflects China’s ongoing interest in Web3, and the official recognition of digital collectible theft as a crime signifies another stride in the nation’s commitment to safeguarding holders and collectors.
In a parallel development in August, China proposed the integration of its social credit system with the metaverse to enhance safety, sparking debates on privacy and control within virtual realms.