Tencent stops sales on its NFT platform Huanhe a year after launch as scrutiny mounts

People visit the Tencent booth at the 2021 China International Trade in Services Fair (CIFTIS) in Beijing, China on September 3, 2021. REUTERS/Florence Lo

HONG KONG, Aug. 16 (Reuters) – Chinese internet giant Tencent Holdings Ltd. (0700.HK) Huanhe, a non-fungible token (NFT) platform, announced Tuesday that it will not open its digital collectibles to the public amid growing regulatory scrutiny of NFTs in the country.

The Shenzhen-based company said Huanhe, which officially launched in early August last year, will not release new NFTs to users starting Tuesday. However, the company says owners of existing collectibles can keep, display, or request a refund of their property.

“Huanhe is adjusting its business based on the company’s consideration to focus on its core strategy,” Tencent said in a statement.

Huanhe is one of China’s largest NFT platforms, and new merch often sells out shortly after launch.

The move marks Tencent’s major withdrawal from the NFT market, which comes under increased scrutiny from Chinese regulators. Digital collectibles in the form of NFTs have gained popularity around the world in recent years, thanks to an active, if not speculative, secondary market.

After state media repeatedly highlighted problems with domestic NFT speculation, tech giants such as Tencent and Ant Group signed a pact in June to halt secondary trading in digital collectibles and “self-regulate” their activities on the market. have signed. read more

Huanhe’s possible closure was first reported by Chinese media last month. In a statement on Tuesday, Tencent didn’t elaborate on what would happen to his Huanhe brand.

The Chinese tech giant has been cautious with its NFT platform in mainland China. Most domestic platforms have largely avoided the term NFTs, opting instead to describe them as “digital collectibles” in an effort to shy away from China’s banned cryptocurrencies.

Reported by Josh Ye.Editing by Kenneth Maxwell

Our criteria: Thomson Reuters Trust Principles.