The NFT issue was discussed in a court held in China. As a result of this court, it was determined that NFTs are virtual properties protected by law, although a result was taken against the NFT buyer.
The case, heard by the Chinese Court on Tuesday last week, addressed a contract dispute over an NFT trading transaction in Hangzhou, the capital city of China’s Zhejiang province.
The court stated that NFT collections actually have property rights such as value, scarcity, readability, and controllability. NFTs also had the unique characteristics of virtual network property, according to court rulings.
According to the court’s statement, the contract under trial was not contrary to China’s laws and regulations. Moreover, this case did not neglect the actual policies and regulations for China to mitigate economic and financial risks. For these reasons, the court decided that this contract should be protected by the laws of the Chinese government.
Because NFTs carry the artistic expressions of the creator, they should be considered intellectual property rights. They are also digital assets created on the blockchain, which can be regarded as virtual property.
According to the Chinese court’s statement, NFT digital collections are in a different category from all tangible and intangible objects in sales contracts, and this category is virtual properties. According to the court’s decision, although NFT collections are a new type of online virtual asset, they are the object of transactions between buyer and seller and must be protected by China’s laws.
He added that although the court considers trading of NFT collections to be legal, Chinese law does not expressly require the legal nature of these collections. He also stated that NFT trading is the same as selling digital products online so that they can be considered e-commerce activities, and China’s E-commerce Law also protects these transactions.