When China’s tech majors started selling non-fungible tokens, they said the products weren’t investment opportunities. This week, fans had to face a disappointing reality: the products really aren’t investment opportunities.
Chinese tech giant Tencent, the owner of WeChat, offered refunds to NFT owners on its Huanhe platform Tuesday, almost a month after it suspended sales.
In a country that has banned all cryptocurrency trading since last year, perhaps it shouldn’t come as a surprise.
But buyers who looked forward to profits from flipping digital art are disappointed.
When the shutdown was first rumored on July 21, NFT WeChat groups lit up with shocked messages. “None of us could believe what had happened,” Zhang Yeli, a 20-year-old university student who had spent 5,000 yuan ($740) on the platform, told Sixth Tone earlier this month. “Tencent can’t just shut down the platform like some small sketchy firms do. At the end of the day, it’s the largest tech company in China.”
Huanhe’s digital collectibles were never marketed as investments, in order to comply with strict Chinese rules forbidding speculation on digital assets, which include bans on cryptocurrency. In fact, there was no way for Huanhe buyers to resell their purchases. Once purchased, products are permanently tied to the buyer’s account. But that didn’t stop speculators from betting that the platform would one day allow resales.
It appears that Huanhe will continue to exist in some form without an NFT market. In a statement provided to Sixth Tone, Tencent said that Huanhe is making “business adjustments,” and that “according to internal sources, these adjustments do not involve a headcount reduction.”
Some view the ongoing incident as an alarming signal to the whole industry. “It will set back interest in the sector as collectors see that even a Tencent-backed platform could close its core businesses all of a sudden,” said Xiao…
