Tencent Holdings’ (0700.HK) Non-Fungible Token (NFT) platform Huanhe will no longer release digital collectibles to the public, the company announced on Tuesday, as regulatory scrutiny of NFTs grows in China.
Huanhe, which was officially launched in early August, will no longer be releasing new NFTs to users as of Tuesday, according to the Shenzhen-based company. However, owners of existing collectibles will be able to keep, display, or request a refund for their items, according to the company.
Huanhe is making business adjustments in light of the company’s consideration to concentrate on its core strategy, Tencent said in a statement.
Huanhe is one of China’s largest NFT platforms, and new collectibles frequently sell out within minutes of their release.
Tencent has withdrawn from the NFT market, which has come under increased scrutiny from Chinese regulators. NFTs, or digital collectibles, have grown in popularity in recent years, owing in large part to an active, if not highly speculative, secondary market.
Following repeated concerns raised by state media about NFT speculation in the country, tech behemoths like Tencent and Ant Group agreed in June to suspend secondary trading of digital collectibles and “self-regulate” their market activities.
Last month, Chinese media reported on Huanhe’s possible shutdown. Tencent did not elaborate on what will happen to the Huanhe brand in its statement on Tuesday.
Chinese tech behemoths have trodden carefully with their NFT platforms on the Chinese mainland. Most domestic platforms avoid the term “NFT,” instead referring to them as “digital collectibles” to distinguish them from cryptocurrencies, which are barred in China.
