![Chinese Court Classifies NFTs in This Way](http://media.assettype.com/voiceofcrypto%2Fimport%2Fwp-content%2Fuploads%2F2022%2F10%2FNFT-Roundup-Opensea-Monthly-NFT-Sales-Falls.jpg?w=480&auto=format%2Ccompress&fit=max)
Hangzhou's Internet court became the first Chinese court in the mainland to adopt blockchain technology in legal procedures. The court ruled that non-fungible token (NFT) collections are online virtual property and should be protected under Chinese law.
The court stance became widely circulated after Wu Blockchain, a crypto blogger, revealed the details of an article posted by the Hangzhou Internet court. The article shows the Chinese government's favorable language for NFTs — after clamping down on cryptocurrencies in 2021.
Interestingly, the Hangzhou Internet court has a speciality as an Internet court, making the court verdict sought after, wide, and near.
On 29 November, the Chinese internet court in the city of Hangzhou posted the proceedings of a court case— filed by a user of a technology platform.
The article highlights that the court declared that Non Fungible token (NFT) collections are online virtual property. Therefore, they are and should be protected under Chinese law.
Similarly, the article says NFTs have the objective characteristics of property rights. These property rights include value, scarcity, controllability, and tradability. The article added that NFTs "belong to virtual network property" that "should be protected by the laws of our country."
It is important to know that over the years, Chinese laws have left NFTs in a legal grey area. It, therefore, became expedient for the court to confirm the legal attributes of the NFT digital collection. Before the case was filed, the Chinese court did not have a clear stipulation or legal attribute for NFTs.
Recently, the Hangzhou court posted a case summary on its WeChat page. An undisclosed user of a technology platform filed the court case— suing the company for refusing to complete a sale and canceling their purchase of an NFT from a "flash sale."
The complainant said the purchase could not be completed due to a KYC verification. The name and phone number they registered did not match their information.
In response, the court said, "NFTs are unique digital assets. They are formed on the blockchain, based on trust and consensus mechanism between blockchain nodes. Therefore, they belong to the category of virtual property."
Similarly, the court added that the transaction brought before the Chinese court is seen as "selling digital goods through the internet." Therefore, the court would treat it as an e-commerce business and will be "regulated by the E-commerce law."
Conclusively, this verdict declaring NFTs as Virtual Property Protected By Law is similar to the Shanghai High people's court. The Shanghai court recently issued a document in May declaring Bitcoin (BTC) as subject to property rights laws. Henceforth, NFTs will be treated as virtual property protected by law.
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