Chinese social media giant Tencent Holdings has halted the sale of its non-fungible tokens (NFT) on the platform Huanhe, in light of scrutiny from regulators, according a report by Reuters.
Huanhe is one of the biggest NFT platforms in China, with new collectibles often sold out instantly upon launch. According to the news agency, now Huanhe will "no longer have digital collectibles available to buy, as legislative pressure builds around the NFT market in China".
Tencent said in a statement that owners of existing collectibles will still be able to hold, display or request a refund for their possessions. "Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business,” it said.
The move marks a major drawback by Tencent from the NFT market, which has come under increased scrutiny from Chinese regulators. Digital collectibles in the form of NFTs have become popular around the world in recent years, despite being a highly speculative secondary market.
The potential shutdown of Huanhe was first reported by Chinese media last month. In its recent statement, however, Tencent did not elaborate on what will happen to the Huanhe brand.
Cryptocurrencies are already banned in China since October last year. Hence in recent times, Chinese tech companies have been cautious with their NFT platforms. In fact, most of these platforms even avoid the term ‘NFT’. Instead, they prefer to describe them as “digital collectibles” in order to distance them from any further controversies.
Shenzhen-based Tencent, whose businesses include WeChat messaging app as well as mobile news, games and payment systems, was also forced to remove all references to NFTs on Huanhe last October after Chinese state entities warned that NFTs were being used for speculation.