In 2022, the National Internet Finance Association of China issued a statement to "firmly curb the financialization and securitization tendencies of NFTs," and the NFT market has seen a decline in popularity year after year.

On December 5, today, the China Internet Finance Association and six other associations jointly issued a “Risk Warning on Preventing Illegal Activities Involving Virtual Currencies and Related Matters.” According to the warning, virtual currencies cannot be used as currency for circulation and usage within China, and Chinese financial regulatory authorities have not approved any activities related to the tokenization of real-world assets. Relevant institutions are prohibited from conducting businesses related to virtual currencies or real-world asset tokens.

Previously, on April 13, 2022, the China Internet Finance Association had also jointly issued an “Initiative on Preventing Financial Risks Related to NFTs,” firmly curbing the tendency toward the financialization and securitization of NFTs, strictly preventing illegal financial activity risks, and consciously adhering to codes of conduct. The initiative jointly called on member units: not to invest in NFTs directly or indirectly, not to provide financing support for NFT investments, not to weaken the non-fungible characteristics of NFTs through means such as fractionalizing ownership or bulk creation, and not to conduct disguised token issuance fundraising (ICO). It also called for not including financial assets such as securities, insurance, credit, or precious metals in the underlying goods of NFTs, and not to issue or trade financial products in disguised form.

After the NFT market’s popularity gradually faded from March of that year, it entered a bear market, and the FTX collapse in November of the same year further drained funds and market information from the bear market. The NFT market has continued to cool off year after year, and since then has gradually become “ignored by the public.”