Complaints Related To Scams And Manipulation Of NFT Prices Increase 30,000 Percent In China By 2022

Many Chinese people have complained about the problem of NFT price manipulation. (Photo; Doc. Unsplash)

JAKARTA - Market participants around the world continue to explore the advantages of using blockchain technology, especially in the non-fungible token (NFT) sector. However, in recent years, there have been several incidents of fraud, price manipulation, and other problems that befell NFT.

This is a special concern for regulators in various countries including China, which in 2022 received an official complaint as much as 30,000 percent higher than the previous year regarding these issues, according to a report from Forkast News.

According to the report, regulators in China received 59,700 NFT-related complaints throughout 2022, an increase from only 198 in 2021. These complaints include the inability of buyers to accept purchased goods, failures in refunds, price manipulations, and high transaction fees.

Despite its anti-crypto stance, China seems to still be considering the potential of the NFT. In December 2022, China announced it would launch its first fully regulated NFT trading platform on the first day of 2023. The platform will be known as the "China Digital Asset Trading Platform" and provides protection and supervision rights for NFT-related institutions and individuals.

In addition, in the same month, the Chinese city of Shanghai also launched a $149 million metaverse fund. The purpose of this fund is to develop the metaverse industry in the country and increase competition in this area. Seven different provinces have announced their plans to become the center of the metaverse in China.

Despite the slowdown in the crypto market in 2022, the NFT market still shows its resilience to price movements. Along with the increasing use of blockchain technology in this sector, the NFT market recorded sales of US$55.5 billion (around Rp853 trillion) throughout 2022, an increase of 175 percent from the previous year's US$20.2 billion (Rp310.7 trillion).

In comparison with 142 million US dollars (Rp2.1 trillion) in 2020, the size of the NFT market in 2022 reflects an increase of 38,903 percent. According to data from CryptoSlate, the total NFT market capitalization has decreased slightly in 2022 due to markets declining and falling to 85 million US dollars (Rp1.3 trillion). However, this amount reflects an increase of 11,644 percent from 10 billion US dollars (Rp153.8 trillion) in 2020.

A report from DappRadar shows that the NFT market returned to levels before winter in February, with trading volumes reaching US$2 billion (Rp30.7 trillion), an increase of 117 percent from US$956 million (Rp14.7 trillion) in January.

Although NFT continues to grow in popularity and market value, the sharp increase in complaints related to fraud, technical problems, and price manipulation in China is in the spotlight for regulators and industry. However, China is also trying to embrace NFT technology by launching the country's first official NFT trading exchange in early 2023.

Through this action, China hopes to help strengthen financial rights and reduce the risk of fraud in NFT trading. In addition, massive investment in the metaverse industry is also made in several provinces to encourage the development of the locally NFT market. In the fast-growing crypto market segment, the NFT industry remains an attractive and potential territory.