China’s NFT Market Plagued by Scams and Price Manipulation, Complaints Skyrocket 30,000%

China’s consumer rights authorities have released a report on the event of World Consumer Rights Day, highlighting the challenges and risks that consumers will face in 2022. The report states that the use of digital collections, such as NFTs, will create more problems and make regulation more difficult. This is due to the lack of clarity in the regulation of NFTs and the increasing interest in them among consumers.

According to the report by the State Administration for Market Regulation, there were only 198 appeals related to NFTs in the previous year. However, this number is expected to rise to 59,700 this year due to various issues such as non-delivery, non-refund, maliciously driving up prices, and charging high fees. The report also noted that some merchants may take advantage of the growing popularity of NFTs to raise prices and engage in unfair business practices.

While NFTs remain a gray area in China, the report warns of the financial risks posed by these digital collectibles. Regulators and state media in China have been critical of NFTs, citing concerns over market manipulation, money laundering, and speculation. Nevertheless, companies and policy makers are looking to tap into the economic potential of this new asset class.

The report also highlighted other consumer-related issues that are expected to arise this year. For example, the growing popularity of “blind boxes” has led to a surge in demand, with consumers making as many as 41,400 related appeals, a year-on-year increase of 61.72%. Meanwhile, the popularity of camping and outdoor sports has led to an increase in demand for sunscreen and mosquito repellent products, which has increased by 99.12% and 149.62% respectively.

The report also warned of quality problems in winter sports such as skiing and snowboarding, with related appeals reaching 8,677, a year-on-year increase of 60.51%. Issues such as counterfeit and shoddy products, delayed delivery, and lack of after-sales service were also noted.

The release of this report underscores the importance of consumer protection in China and the challenges that consumers face in the digital age. As China’s market continues to evolve and new business models emerge, regulators will need to be vigilant in protecting the rights and interests of consumers.

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