Half moon talk: don't let "NFT" become a new favorite of hype

Published on 1 Months ago   215 views   0 Comments  


Commentator on semimonthly talks LAN Tianming

In the context of China's crackdown on the speculation of virtual currency trading, many capital and currency speculators have aimed at a new direction - non homogeneous token (NFT).

The full name of NFT is non fungible token, also known as non homogenous token. As an innovative application of blockchain technology, NFT is used as a voucher to mark specific digital assets, showing certain potential value in enriching the digital economy model and promoting the development of cultural and creative industries. Among them, the field of digital collections is one of the fastest application scenarios of NFT.

In recent years, NFT has frequently sold "sky high prices" of digital collections such as seemingly ordinary mosaic avatars, pictures and videos. The sales volume of NFT's collection has exceeded US $10 billion, which is the largest in the world.

But behind the frequent occurrence and popularity of "sky high prices",NFT has the tendency of financialization and securitization, hiding a large number of "knock on" and "rat warehouse" behaviors, and illegal and criminal acts such as speculation and trading, money laundering and fraud began to emerge.

In foreign countries, NFT of digital collections often uses virtual currency for trading, and there is no restriction on circulation. Some speculators use the NFT products to be promoted to make profits, and raise the price through "sky high price" auction or multi-party confrontation with "insiders". In order to earn high handling fees, some NFT trading platforms use social media hype to induce users to continue trading, which has evolved into a scam of "cutting leeks".

Recently, some foreign buyers tried to auction the digital collection NFT bought by millions of dollars again, but there was no interest and the quotation shrank by nearly 10000 times, and finally became the "receiver".

At present, large and small platforms in the domestic NFT ecosystem are operating and crazy "pioneering", and some Internet leading enterprises are also involved. These domestic NFT trading platforms basically use RMB for trading, and many platforms do not restrict the secondary circulation of NFT.

The attendant risks should not be underestimated. Some digital collections have been split and traded, breaking the non homogeneity of NFT, which may promote NFT related businesses to evolve into illegal fund-raising, illegal issuance of securities and other illegal financial activities.

At the same time, domestic NFT issuers and trading platforms have not been forced to carry out real name authentication for issuers, sellers and buyers, laying hidden dangers for money laundering in the field of NFT.

How to guide the healthy development of NFT in China, "take its essence and discard its dross" should be the right way.It is necessary to strengthen supervision in this field and improve the ability of early warning, prevention, resolution and disposal of relevant risks.

Recently, China Internet Finance Association, China Banking Association and China Securities Association issued an initiative calling on member units to resolutely curb the tendency of NFT financing and securitization and strictly prevent the risk of illegal financial activities. The three associations made requirements for member units to participate in NFT projects from the aspects of issuing financial products, providing trading services, public offering and financing, pricing and settlement, real name certification, investment and financing, in order to cut off the secondary trading link of NFT.

Although the state has clear provisions on the risk prevention of virtual currency, there are still deficiencies in the regulatory rules for virtual assets such as digital collections and derivatives. Relevant departments urgently need to increase the exploration and Research on NFT supervision, issue relevant laws and regulations as soon as possible, and avoid illegal acts such as malicious speculation of NFT products and fund-raising fraud by borrowing NFT concepts.

On the one hand, relevant departments in culture, intellectual property and other fields need to formulate relevant regulations and policies to clarify the business norms of NFT as a digital collection. On the other hand, financial regulatory authorities need to strengthen risk monitoring and risk warning to prevent the risk of illegal financial activities.

Especially for some signs of risk, the regulatory authorities should act decisively, make clear their position, and timely give risk tips to the public. As a new technology, the impact of blockchain on future economic and social development is self-evident. All parties in the ecological chain must not only focus on the short-term "sky high price" interests and ignore the long-term healthy development. Be careful that there is only speculation left in the "real to virtual" innovation business, and don't let the "blue ocean" become a "Dead Sea".

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