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NFT Market suspends most sales, citing ‘rampant’ counterfeits and plagiarism

Sales of NFTs, or non-fungible tokens, soared to around $25 billion in 2021, leaving many perplexed as to why so much money is being spent on items that don’t physically exist and that anyone can view online for free.

NFTs are cryptographic assets that record ownership of a digital file such as an image, video, or text. Anyone can create, or “make”, an NFT, and ownership of the token generally does not confer ownership of the underlying item.

US-based Cent made one of the first known million-dollar NFT sales when it sold the former Twitter CEO’s tweet as an NFT last March. But since Feb. 6, it stopped allowing buying and selling, CEO and co-founder Cameron Hejazi told Reuters.

“There’s an array of activity that’s happening that shouldn’t be happening — like, legally,” Hejazi said.

While the Cent marketplace “beta.cent.co” has suspended NFT sales, the part specifically for selling tweet NFTs, called “Valuables”, is still active.

Hejazi highlighted three main issues: people selling unauthorized copies of other NFTs, people creating NFTs with content they don’t own, and people selling sets of NFTs that look like a title.

He said these issues were “endemic”, with users “hitting and hitting and hitting counterfeit digital assets”.

“It kept happening. We were banning offensive accounts, but it was like we were playing a game of moles… Every time we banned one, another popped up, or three more popped up.”

“Money Chases Money”

Such issues may become more evident as bigger brands join the rush to so-called “metaverse,” or Web3. Coca Cola (CPEC) and luxury brand Gucci are among the companies to have sold NFTs, while Youtube said it will explore NFT features.

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

“I think that’s a pretty fundamental problem with Web3,” he said.

The largest NFT marketplace, OpenSea, valued at $13.3 billion after its latest round of venture capital funding, noted last month, more than 80% of NFTs minted for free on its platform were “plagiarized works, fake collections and spam”.

OpenSea tried to limit the number of NFTs a user could create for free, but later reversed that decision following a backlash from users, the company said in a Twitter thread, adding that it was “working on a number of solutions” to deter “bad actors”. ” while supporting creators.

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

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“We are working around the clock to ship products, add features and refine our processes to meet the moment.”

For many NFT enthusiasts, the decentralized nature of blockchain technology is attractiveallowing users to create and trade digital assets without a central authority monitoring the activity.

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

It was after the sale of Dorsey NFT that Cent began to get an idea of ​​what was going on in the NFT markets.

“We realized that a lot of it was money chasing money.”