Advertisement
.jpeg?itok=2jZ4K5hO&v=1679887408)
The View | Resolving NFT disputes in the art world needs more action and awareness on arbitration
- A common problem with any innovation is that laws can be slow to catch up, leaving individuals and businesses exposed to risk and uncertain about what to do
- Arbitration can help settle NFT disputes in a private and friendly manner, but more must be done to educate people about their options
Reading Time:4 minutes
Why you can trust SCMP
Art Basel Hong Kong, Asia’s biggest art fair, recently opened its doors to the world for the first time since the Covid-19 pandemic. This event is an important barometer of the success of Asia’s art scene but, nowadays, it is not just traditional artwork drawing attention and investment. Non-fungible tokens (NFTs) are a hugely popular and accessible form of art which draws a broader market of buyers.
Advertisement
NFTs are blockchain-based tokens which represent a unique asset such as a piece of art, video or other type of digital content. Brought into the mainstream by the landmark sale of digital mosaic Everydays – The First 5,000 Days in March 2021 by Christie’s for US$69.3 million, the NFT market has continued to grow and develop.
In China, NFTs are seen as an important building block for future growth. Shanghai’s 14th five-year plan for developing its digital economy, issued last year, underlined its support for leading enterprises to establish NFT trading platforms.
With the government’s support, the China Digital Asset Trading Platform officially launched on January 1. Unlike previous trading platforms, which are only open to primary transactions, the government-endorsed platform allows secondary, user-to-user transactions.
Hong Kong, which has also set out a vision of becoming a global virtual asset hub, published a policy statement on the development of virtual assets in the city last October. Amid the growth of these hubs, it is reasonable to expect increasing disputes. More complex issues will follow, such as whether to choose a public or private chain and how to determine the ownership of digital assets if a private chain is chosen.
05:15
SCMP Explains: What are NFTs?
SCMP Explains: What are NFTs?
While the growth of NFTs in Hong Kong, mainland China and across Asia more broadly is great news for the art world, this burgeoning market does hold its own inherent risks, and the number of disputes related to NFTs is growing. Recent reports suggest that consumer complaints in China about NFTs over pricing and service problems surged 300-fold in 2022, exposing a problem that has become increasingly difficult to address, according to the State Administration for Market Regulation.
Advertisement