The last few years have been quite a journey for nonfungible tokens (NFTs), going from niche art collectibles to marketing tools for major global corporations. To be sure, what often follows hype is regulation.

China became the latest country to offer a key regulatory framework in its first-ever case dealing with NFTs—and the copyright violations they are sometimes saddled with—in Hangzhou Internet Court in April. In its decision, the court held NFT marketplaces liable for poor vetting of copyright violations on its database, imposing stricter burdens on them than on e-commerce platforms that enjoy the protection of the "safe harbor rule."