“In 2022, China saw NFT complaints gushed by 300X”, says SAMR
- As per the SAMR report, NFT-related complaints reached a record high in 2022.
- The regulator also faced a rise in complaints from various other sectors.
Consumer complaints in China regarding NFTs were gushed 300 times in 2020, exposing a bigger unaddressable problem. It has become increasingly difficult to tackle the issue, according to the State Administration for Market Regulation (SAMR), the nation’s crypto market regulator.
NFT-related Complaints in China
The Non-Fungible Tokens (NFTs) complaints filed via SAMR reached 59,700 in 2022, of which only 128 recorded cases existed in 2021. This can also be attributed to the time when Chinese firms were still wandering and testing the markets of digital collectibles. Complaints cover areas like refund refusals, extra fees, and price manipulations.
In mainland China, most NFTs are referred to as digital collectibles and can only be purchased via legal tenders, as Beijing had already banned cryptocurrencies. According to SAMR, the root cause was the still-evolving business model. This scenario makes it cumbersome for the authorities to levy any regulations.
The national government of China has constantly been checking and repressing blockchain-based assets for years, as they think it’s a threat to their financial stability. This forced the industry leaders to step back from the strictly-regulated sector. For instance, Tencent Holdings declared last summer to close their NFT platform Juane. They discontinued sales last year, and the operations would close in June 2023.
Global Conditions and NFTs
The NFT world suffered globally due to recent incidents and market uncertainty. The FTX-saga of November 2022 pulled the prices to the bottom. The recent closure of Silicon Valley Bank and Signature bank also severely affected their prices. A possible reason for the effect was major NFT players had assets in SVB, including Yuda Labs, the creator of Bored Ape Yacht Club.
Beijing is still committed to developing blockchain technology, especially after President Xi Jinping favored the technology back in 2019. In January 2023, China launched a fully regulated digital asset trading platform to facilitate the transactions of NFTs and certain intellectual properties.
China and Complaints
Although these complaint numbers seem to be big, they only make up a small percentage of the total 13 million cases received by the SAMR in 2022. Many other sectors, like the internet and tech business segments, including cross-border e-commerce, were accused 34,500 times. These complaints accounted for 42.6% of last year. Most were regarding counterfeit products, and sellers failed to meet the warranty commitments.
There were also complaints about live-streaming e-commerce, a popular business model allowing people to watch live videos and shop for their favorite items simultaneously. The complaints in this exciting sector climbed 115% to a whopping 220,900 complaints. Most of which revolved around poor-quality products and false advertising.
The new energy cars sector could not be free from complaints; as per SAMR, they received 16,000 complaints, heaving 62.8% in comparison. Most of them revolved around contracts and quality issues of the vehicles, like engine rattling, battery damage, and sudden stalls.
Every consumer sector is bound to have some consumer-related issues. These highlight the weak points in the products and services. Certainly, there must be an authority that people can go to for settlement. But so many complaints from a sector create a cause of concern that must be dealt with swiftly.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
