A spectator views a NFT art work at a NFT art exhibition held in Beijing. Photo: cnsphoto

The police department in Shangqiu, Central China's Henan Province recently cracked down on a non-fungible token (NFT) collection scam case involving more than 2.65 million yuan ($372,196.24), the Chengdu Economic Daily reported on Sunday. 

Legal experts said that the case was the first NFT collection related crime officially reported by a public security department, the report noted. 

According to local police, after receiving a tip-off, a group of eight members committed crimes by selling virtual cartoon pictures basing on mobile app platforms, and using so-called cashback, rewards and prize pool to scam more than  2.65 million yuan of income. 

From 2019 to November 2022, there were a total of 2,303 platforms involved in the business of NFT collections in China. As of press times, there are more than 1,800 NFT collection-related reports on Chinese consumer complaints platform Black Cat, including queries of failing to receive item after purchasing, cash withdrawal failures and platform shutdowns without reason and compensation. 

In April 2022, the National Internet Finance Association of China, China Banking Association and Security Association of China co-issued an appeal to prevent NFTs from triggering systematic financial risks, reported the Xinhua News Agency. 

In September, the China Mobile Communication Association and the China Communications Industry Association vowed to boycott the excessive speculations on NFT collections, according to the Securities Daily. 

Global Times