- Their number has increased by 30,000% in a year
- The most frequent complaint was the inability to receive the goods or return it to the seller
In 2022 China’s top regulator received a record number of user complaints about NFTs. They concern cases of fraud and price manipulation. This is stated in a report released on the eve of World Consumer Rights Day in China. The author of the study is the State Administration for Market Regulation.
So, the number of requests in 2022 increased by 30,000% compared to 2021. Most of the complaints related to the inability to “receive the goods after the purchase”, most likely, customers had difficulties with minting or storing NFTs.
There are many complaints about problems with the return of goods. The sellers refused to transfer funds back if the client suddenly changed his mind about owning the art token. There have also been complaints about price manipulation and high transaction fees.
World Consumer Rights Day is an annual event where Chinese media and authorities report on cases of market abuse. In the past year, regulators have been reporting massive cryptocurrency-related scams.
Recall that crypto trading is prohibited in China. But NFT transactions remain in a gray area. The authorities refer to such tokens as “digital collectibles.”
Now China is planning to create a new financial regulator to control risks. In practice, this means that censorship in China will become even tougher.