A court in China’s eastern city of Hangzhou issued a landmark judgment against a Chinese marketplace BigVerse for allowing a user to mint NFTs from stolen artwork.
The court’s verdict towards the NFT marketplace was made after Shenzhen-based company Qice filed a lawsuit against NFTCN’s parent company, Bigverse.
According to the plaintiff, a user on the NFTCN marketplace listed an NFT with artwork by artist Ma Qianli depicting a cartoon tiger receiving a vaccine shot. An anonymous user sold this cartoon tiger NFT for $137.
To compensate for the loss, BigVerse was ordered to pay Qice a fine of $611 and stop the NFT from being circulated by sending it to a “null address”, which is essentially a crypto wallet with no private key.
The court accused BigVerse of failing to ensure whether the user minting the NFT was the rightful owner of the artwork. It further suggested that the NFT marketplace should set up a copyright vetting mechanism to verify the artworks listed by users on its platform.
Earlier this year, an NFT collector Timothy Mckimmy who lost his BAYC NFT in a cyberattack dragged OpenSea to court after citing a lack of preventive safety measures on the platform.
Considering such cases, China has issued a stern warning against its citizens committing financial crimes using NFTs and metaverse. The Supreme People’s Procuratorate warned of “severe punishment” for financial crimes such as money laundering and illegal fundraising.
