More On: NFT
The CEO admitted it outright.
Because it was being used to contravene the law, a marketplace best known for selling a non-fungible token (NFT) of former Twitter CEO Jack Dorsey's first tweet had to "stop" nearly all purchases.
According to Reuters, the NFT marketplace Cent has had to halt almost all purchases because "there's a spectrum of behavior that is happening that basically shouldn't be happening - like, legally," as CEO Cameron Hejazi revealed.
Hejazi stated in a "community update" that "bad actors" had been utilizing Cent to "mint" counterfeit NFTs, which entailed selling copies of NFTs they didn't own or producing NFTs of stuff they didn't own.
In other words, the marketplace ran into the very issue that NFTs were created to address: allocating rights to digital things that individuals actually own.
Cent highlighted a lack of a "industry wide standard for counteracting undesirable behavior" as the reason for suspending nearly all NFT sales until the market puts out "a strategy to tackle the issues we're having."
The shutdown does have one major exception: Cent is still permitting the sale of "Valuables," or NFTs of tweets "autographed" by their original posters, including as Dorsey's tweet, which sold for the crypto equivalent of $2.9 million in March 2021.
Hezaji sees it as a sign of a much larger problem. Counterfeiting is "a really basic concern with Web3," the CEO told Reuters.
Web3 is the umbrella term for a future version of the internet that is based on blockchain technology such as NFTs.
Cent is far from the first platform to be plagued by the NFT movement's voracious appetite for fraud. After acknowledging that more than 80% of the tokens created with the program "were plagiarized works, false collections, and spam," prominent NFT marketplace OpenSea limited the usage of its free minting feature last month.
Every decision we make, we make with our creators in mind. We originally built our shared storefront contract to make it easy for creators to onboard into the space.— OpenSea (@opensea) January 27, 2022
The concept of "theft" of an NFT, which has no tangible value to its owners, appears to be a foregone conclusion in many ways. On the other hand, the tendency could be interpreted as legitimate retaliation by scammers for participating in an overpriced market.
Whatever one's opinion of NFTs, the fact is that there is a massive amount of fraud in the field, which should raise a lot of red flags.
It is now, more than ever, necessary to make a determined effort to root out the fraudulent elements that plague NFTs and the Web3 movement.
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