A court in the Chinese city of Hangzhou has determined that non-fungible tokens, or NFTs, represent virtual property protected by the laws in the People’s Republic. The ruling comes from a case over a dispute between a customer and a platform hired to sell a collection of tokens.

The court further elaborated that “as a virtual artwork, an NFT digital collection itself condenses the creator’s original expression of art and has the value of related intellectual property rights. At the same time, NFT digital collections are unique digital assets formed on the blockchain based on the trust and consensus mechanism between blockchain nodes.”

Therefore, the Hangzhou court concluded, NFT collections belong to the category of virtual property. It also expressed its position that the transaction in the case represents the business activity of selling digital goods through the internet, hence it belongs to e-commerce activities and should be regulated as such under China’s “E-commerce Law.”