June 19, 2024

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Marketplace suspends most NFT sales, citing “rampant” fakes and plagiarism

Marketplace suspends most NFT sales, citing "rampant" fakes and plagiarism

LONDON (Reuters) – The platform that sold NFT’s first tweet to Jack Dorsey for $2.9 million halted most transactions because people were selling tokens for content that didn’t belong to them, its founder said, calling the issue a “fundamental problem” in the fast-growing digital asset market.

Sales of NFTs, or non-fungible tokens, have risen to nearly $25 billion in 2021which has left many at a loss as to why so much money is spent on physically non-existent items that anyone can watch online for free.

NFTs are cryptographic assets that record ownership of a digital file such as an image, video, or text. An NFT can be created or “mined” by anyone, and ownership of the token does not usually give ownership of the underlying item. Read more

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fraud reports, fake And “laundering trade” became popular.

US-based Cent executed one of the first multi-million dollar NFT sales when it sold the first Twitter CEO tweet as NFT last March. As of February 6, Cameron Hegazy, CEO and co-founder of Reuters, told Reuters it had stopped allowing buying and selling.

“There is a spectrum of activities that happen that basically shouldn’t happen — like, legally speaking,” Hegazy said.

While Cent marketplace “beta.cent.co” has temporarily halted sales of NFTs, the portion devoted to selling NFTs of tweets, called “Valuables”, remains active.

Hegazy highlighted three main problems: people selling unauthorized copies of other NFTs, people making NFTs for content that doesn’t belong to them, and people selling collections of security-like NFTs.

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He said these issues are “rampant”, with users “mining, minting, and minting fake digital assets.”

“It just kept happening. We were banning the offending accounts, but it was like we were playing a whack-a-mole game…Every time we ban one, another account will show up, or three more.”

“money chase”

Such problems may come into greater focus when major brands join the rush into the so-called “metaverse,” or web 3. Coca Cola (KO.N) And luxury brand Gucci is among the companies that sold NFTs, while Youtube He said he would explore the features of the NFT.

While Cent, with 150,000 users and revenue “in the millions,” is a relatively small NFT platform, Hegazy said the problem of fake and illegal content exists across the industry.

“I think this is a fairly basic problem with Web3,” he said.

NFT’s largest marketplace, OpenSea, valued at $13.3 billion after latest project funding round, He said last month More than 80% of the NFTs minted for free on its platform were “stolen works, fake groups, and spam.”

In a series of tweets, the company said that OpenSea had tried to limit the number of NFTs a user could issue for free, but retracted that decision after backlash from users, adding that it was “working through a number of solutions” to deter “bad actors”. With the support of the creators.

“It is against our policy to sell NFTs using plagiarized content,” an OpenSea spokesperson said.

“We’re working around the clock to ship products, add features, and improve our processes to meet the moment.”

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For many NFT fans, the decentralized nature of blockchain technology Attractive, as it allows users to create and trade digital assets without a central authority controlling the activity.

But Hegazy said his company is keen to protect content creators, and may introduce centralized controls as a short-term measure in order to reopen the market, before exploring decentralized solutions.

After the sale of the Dorsey NFT Cent began to learn about what was going on in the NFT markets.

“We’ve come to realize that a lot of it is just money chasing after money.”

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(Reporting by Elizabeth Hawcroft, Editing by Louise Heavens and Andrew Heavens)

Our criteria: Thomson Reuters Trust Principles.