The nonfungible token (NFTs) platform famous for minting Jack Dorsey’s first tweet has suspended all NFT operations amidst forging and illegal activity claims.
Rampant issues that are related to minting phony nonfungible tokens (NFTs) have forced the popular marketplace Cent to stop some of its operations. Launched in 2017, Cent started as a “social network and informal platform for creative experimentation.”
In 2020, the team also decided to unveil a NFTs platform known as Valuables to mint and auction iconic tweets. Interestingly, Jack Dorsey’s first tweet, “just setting up my twttr,” was sold for $2.9 million on the platform in March 2021.
On February 6, the platform stopped nonfungible token trading activities as a result of a spectrum of activity that should not have been happening. The co-founder of Cent, Cameron Hejazi, told reporters:
“People in this space tend to cry ‘caveat emptor’ or ‘buyer beware’ but protecting creators from those who might steal or abuse their work — and protecting buyers from potential fraud— is very important.”
Hejazi also told Reuters that the matter was threefold. First, the sale of illegal NFT copies, second, the trading and sale of stolen content that was changed into NFTs, and finally, the sale of NFT sets that somehow resemble securities.
Amidst the NFT money-laundering worries, the first nonfungible token-related seizure in a United Kingdom VAT fraud case, and even NASA coming in heavily with its criticisms of the space, NFTs have undoubtedly had a rough start in 2022.
Umberto Canessa Cerchi is the CEO of Kryptomon. Kryptomon is described as an NFT play-to-earn (P2E) blockchain game. Cerchi said that while increasing reputational worries are a concern for the sector, it is not adequate to put off the potential first-time NFT buyers. He said that among the first-time buyers:
“Most of them will end up buying a fake, and then when they find out about it, they will declare all NFTs ‘scams,’ and that’s bad for the industry.”
Cerchi also shared that:
“Consumer protection laws” may improve the situation and better education would “prevent the industry from becoming a victim of fraud.”
The NFTs Space Will Mature With Regulation
Phil Gunwhy is a Partner and Brand Strategist at Blockasset.co, which became the first athlete-verified NFT sports platform. Gunwhy is optimistic about the future of NFTs and regulation in the budding space. He told reporters:
“The problem with fake listings is correlated directly to how marketplaces do not regulate the listings that appear. There are many marketplaces that do now allow users to upload and create NFTs on the fly and instead only allow verified listings.”
Furthermore, he believes that developing the relevant regulations might be challenging in the near term. However, there is an expectation that it might trickle down to the NFT ecosystem.
As the United States Treasury now targets money laundering and NFTs, there might be more scrutiny brewing in the coming months. Eventually, Hejazi hopes to launch an industry-wide conversation around this matter to get rid of all criminals and offenders.
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