Chinau2019s averse approach to NFTs and cryptocurrencies has led to domestic traders finding a way to evade regulatory hurdles by engaging in off-the-book transactions.u00a0
In China, cryptocurrency payments are outlawed, and all NFT transactions are tendered with the yuan. NFTs are stored on databases managed by Chinese enterprises instead of living on a blockchain. Through such policies, many digital collectible platforms have blocked the ability for NFTs to be resold, which means that, in theory, the Web3 hype can never really get going in the region as only direct sales can be made.u00a0
Through these predicaments, many companies have begun allowing users to transfer ownership of NFTs. It is u2018assumedu2019 that no money ever changes hands between matched buyers and sellers.u00a0
As the title of this article suggests, this is not the case. The example of the recent sale of a 10,000-piece NFT collection of Miao (a Chinese ethnic group) traditional headpiece showcases this, as in the wake of its launch (by Ant Group, the financial arm of Alibaba Group Holdings), many of the assets were listed on an online Chinese flea market with a 50% markup. It is thought that such flea markets are working in tandem with the platforms that match buyers with sellers to create a two-part black market dynamic collectively.
Of course, we can assume that the authorities are aware of such ongoings, so when they do finally clamp down on them, they will either cease to exist or become economically illogical to engage with.u00a0