China’s Supreme People’s Procuratorate Examines Legal Issues of NFTs Amid Booming Digital Economy

China’s Supreme People’s Procuratorate has turned its attention to the legal challenges associated with non-fungible tokens (NFTs), amidst the booming digital economy, according to an announcement made on its website.

As new-age technologies like blockchain and concepts like the “metaverse” gain global traction, emerging applications like NFTs have become the focus of market attention. NFTs, essentially digital asset certificates recorded on the blockchain, represent a new area of application for blockchain technology and have significant development potential.

However, as an emerging field, the laws and regulations related to it are still in nascent stages. Alongside the burgeoning interest in NFTs, there are increasing concerns about potential financial, management, and cyber security risks, with legal risks being a particular focus for procuratorial agencies.

Wang Xiafang, one of the experts cited in the report, urged judicial authorities to accurately discern between innovative development and unlawful activities. It is crucial to both protect genuine innovation and promptly identify and penalize fraudulent activities masquerading as innovation, to prevent the phenomenon of “bad money driving out good”.

Sun Shan, another expert, highlighted the role of copyright compliance governance on trading platforms, especially in situations where the creator and the minter of NFTs are not the same entity. The ideal scenario is when the creator and the minter are the same, but if not, it’s essential for the platform to ensure copyright compliance.

Ruan Shenyu, also contributing to the discussion, clarified the ownership rights of consumers in terms of NFTs. From a property rights perspective, consumers do not have full ownership of the NFT digital assets in the traditional legal sense. They cannot prevent others from accessing, copying, or disseminating the digital assets linked to their NFTs. What consumers do have is an exclusive right that prevents others from unauthorized alteration of the NFT’s ownership recorded on the blockchain.

The Supreme People’s Procuratorate is keen to engage experts and practitioners in a broad discussion on the legal status and risk management of NFTs, highlighting the significant interest and concern surrounding this emerging technology in China’s legal circles.


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DLT in Capital Markets: A Strategic Assessment of Opportunities and Risks – A Report by the Global Financial Markets Association

The Global Financial Markets Association (GFMA) has released a comprehensive report examining the opportunities and challenges presented by Distributed Ledger Technology (DLT), including DLT-based Securities and associated activities across the securities lifecycle.

The report, developed in collaboration with GFMA member firms, incorporates the insights of industry practitioners at the forefront of DLT use cases research and application worldwide.

The report indicates that innovation in distributed computing and data encryption, embodied in DLT and the emerging digital asset ecosystem, could have a fundamental impact on the next major wave of capital market developments. The technology is seen as a potential catalyst for operational efficiency, cost savings, product innovation, broader market access, and new liquidity pools.

The current focus is ensuring that DLT applications meet regulatory requirements and mitigate any potential risks associated with the use of this new technology. Several jurisdictions are introducing sandboxes or pilot regimes to facilitate firms’ experimentation with and issuance of DLT-based products. Live use cases in capital markets, profiled in the report, are already beginning to capitalize on opportunities and deliver benefits to clients while remaining compliant with existing rules and regulations.

The emergence of DLT and the digital asset ecosystem represents a critical juncture. As regulators worldwide formulate policy to govern the ecosystem, it is crucial to ensure stability and protections for market participants in digital asset markets. The report aims to guide policymakers and market participants in identifying regulatory, supervisory, and risk management practices that not only offer stability and protections but also permit the industry and economy to leverage the benefits of DLT.

Despite the growing momentum behind DLT use cases, there is yet to be widespread adoption of DLT-based Securities. DLT-based issuances have been largely experimental, and liquidity in Primary and Secondary Markets remains significantly below the levels expected in the long term. The report warns that siloed approaches and diverging regulatory regimes could hinder progress towards a broader, coordinated DLT-based ecosystem.

To foster confidence among industry participants, the GFMA underscores the need for cross-industry consensus. This consensus should aim to promote development around specific use cases and encourage stakeholders to proactively shape the emerging ecosystem in its foundational phase of development. In response, the GFMA and its members have proposed five calls to action to overcome existing adoption barriers and further the development of DLT-based capital markets. These calls to action are targeted at industry participants and regulators alike.


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Digital Asset Outflows Continue for the Fourth Week, but Selective Investments Show Optimism in the Market: According to CoinShares

According to CoinShares’ Twitter, the leading alternative asset manager in Europe specializing in digital assets, digital asset investment products have seen a fourth consecutive week of outflows, totalling $54 million. This has brought the total outflow to $200 million.

These outflows have been widespread across regions, reflecting a negative sentiment among investors that isn’t limited to a few players. Interestingly, a significant portion of these outflows was seen in Germany, amounting to $30 million. In the United States, 84% of the outflows came from investors selling their short positions.

Bitcoin ($BTC) remains the focal point of investor activity, with outflows totalling $38 million. Over the past four weeks, Bitcoin has witnessed an outflow of $160 million, representing 80% of all outflows over this period.

While outflows have been a concern, some investors are showing a daring streak. This week, multi-asset investments saw outflows of $7 million, but there were notable inflows into Cardano (#ADA), Tron (#TRX), and Sandbox (#SAND). This suggests a more adventurous and selective approach by investors in the digital asset space.

Despite the continued outflows from digital asset investment products, it’s important to highlight that they represent only 0.6% of total Assets under Management (AuM). This suggests that while the market is experiencing short-term volatility, the long-term outlook for digital asset investments remains robust. CoinShares continues to set a new standard for institutional excellence in the digital asset industry, even in these uncertain times.


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Bitcoin Price Analysis: Navigating Between Key Support and Resistance Levels

Bitcoin has just breached the 27,000 level, currently portraying a considerably weak trend.

The 89-day moving average serves as a crucial support level, warranting close monitoring. On March 10, Bitcoin dropped to the 89-day moving average, triggering a rebound exceeding 50%. Last Friday, following a dip below the 89-day moving average, Bitcoin promptly initiated a rebound, peaking at 27,650. Currently, Bitcoin continues to consolidate above the vicinity of the 89-day moving average. A significant breakdown below the 89-day moving average without a subsequent recovery may potentially ignite a new round of substantial decline.

From the 4-hour chart perspective, Bitcoin is navigating a downtrend channel. Post-rebound, Bitcoin failed to breach the recent high of 28,290, indicating the downward trend remains unbroken. 

As per the 4-hour chart, the recent rebound also exhibits factors of RSI and MACD bullish divergence. Currently, the 55-period line on the 4-hour chart is a conspicuous resistance level. Bitcoin needs to surpass this 55-period line on the 4-hour timeframe to possibly initiate a further upward surge.

Prior to the emergence of a clear direction, Bitcoin may continue to consolidate within the box defined by the 89-day moving average support line and the 55-period resistance line on the 4-hour chart.

Please note that the data and indicators mentioned are based on the Bitcoin price chart from Binance.


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UK Legislators Advocate for Treating Crypto Trading Similar to Gambling Regulations

In a recent report, a UK legislative committee has acknowledged the potential of cryptoassets and their underlying technologies to revolutionize financial services, particularly in streamlining payments and reducing associated costs. They specifically point to the potential benefits for cross-border transactions and economies with underdeveloped financial sectors.

However, the committee raised concerns about the current regulatory challenges faced by the Financial Conduct Authority (FCA) in managing the burgeoning cryptoasset industry, emphasizing the need for the Government and regulators to keep pace with these rapidly evolving technologies.

While the committee supports innovation in the financial sector, they caution that the true extent and impact of cryptoasset technologies remain uncertain, with significant risks to both consumers and the environment.

The legislators recommend a balanced approach, urging the Government to avoid investing public resources in cryptoasset activities without a clear, beneficial use case. They cite the recent failed attempt to produce a Royal Mint non-fungible token (NFT) as an example of misdirected efforts.

The report also calls for a shift in the regulatory approach towards unbacked cryptoassets, such as Bitcoin and Ether. Due to their volatility and lack of intrinsic value, the committee argues that these assets pose substantial risks to consumers, likening speculation in these assets to gambling.

Therefore, they strongly recommend that retail trading and investment in unbacked cryptoassets be regulated as gambling rather than as a financial service, to prevent consumers from misinterpreting the risks involved.


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