The non-fungible token (NFT) platform of Chinese internet giant Tencent Holdings, Huanhe, will no longer release digital collectibles to the public, it said Tuesday, as surveillance of NFTs increases in the country.
The Shenzhen-based company said Huanhe, officially launched in early August last year, will stop releasing new NFTs to users from Tuesday. But the company said owners of existing collectibles will still be able to hold, display or reclaim their belongings.
“Based on the company’s consideration of focusing on its core strategy, Huanhe is adjusting its operations,” Tencent said in a statement.
Huanhe is one of the largest NFT platforms in China, with new collectibles often selling out right after launch.
The move marks a significant withdrawal of Tencent from the NFT market, which has come under increased scrutiny from Chinese regulators. Digital collectibles in the form of NFTs have become popular around the world in recent years, thanks in large part to an active if not highly speculative secondary market.
After state media repeatedly addressed issues surrounding NFT speculation in the country, tech giants including Tencent and Ant Group signed a pact in June to end secondary trading of digital collectibles and “self-regulate” their activities in the marketplace.
The possible closure of Huanhe was first reported by Chinese media last month. In its statement on Tuesday, Tencent did not elaborate on what will happen to the Huanhe brand.
Chinese tech giants are cautiously treading their NFT platforms in mainland China. Most domestic platforms usually avoid the wording NFT and choose to describe them as “digital collectibles” in an effort to distance them from cryptocurrencies, which are banned in China.