Tencent halts sales on NFT platform Huanhe

Chinese internet giant Tencent will stop selling digital collectibles on its NFT platform, Huanhe, amid tightening regulatory scrutiny on NFT business in the country, Reuters reported.

Huanhe no longer released new NFTs to users starting August 16, though owners of existing tokens would still be able to hold, display or request a refund for their items, Tencent was quoted as saying.

“Based on the company’s strategic consideration to focus on its core business, Huanhe will adjust its business operations,” Tencent said in a statement.

Earlier, in July, Chinese media reported that Huanhe, launched last August, might have to shut down. The latest move marks a major retreat by Tencent from the NFT market.

China is increasingly regulating NFT and crypto-asset related services. In April, the China Banking Association, the Securities Association of China and others issued a joint statement warning of the “hidden risks” of NFT investment, stating that NFT trading involves hidden financial risks such as excessive speculation, money laundering and illegal activities. 

They also said that in order to protect consumers’ rights and interests and maintain the integrity of the industry, member institutions of the China Banking Association should not regard NFTs as financial instruments.

Chinese state media have repeatedly highlighted issues related to excessive speculation in domestic NFTs. 

In June, tech giants such as Tencent and Ant Group, a financial services company under Alibaba Group, China’s largest e-commerce company, signed an agreement to suspend secondary trading of digital collectibles and “self-regulate” their activities in the market. Some social media sites, including Tencent’s messaging app WeChat, have removed their NFT platforms earlier this year.