Marketplace Freezes Most NFT Sales Due To Fakes, Plagiarism

The platform which sold an NFT of Jack Dorsey's first tweet for $2.9 million has halted most transactions as people were selling tokens of content that did not belong to them, its founder said, calling it a "fundamental problem" in the digital assets market, Elizabeth Howcroft reported for Reuters.

Photo Insert: Cent is temporarily pulling the plug on the sale of NFTs due to a number of complicating issues.

Sales of non-fungible tokens (NFTs), soared to around $25 billion in 2021, leaving many baffled as to why so much money is being spent on items that do not physically exist and which anyone can view online for free.

NFTs are crypto assets that record the ownership of a digital file such as an image, video or text. Anyone can create, or "mint," an NFT, and ownership of the token does not usually confer ownership of the underlying item. Reports of scams, counterfeits and "wash trading" have become commonplace.

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

"There's a spectrum of activity that is happening that basically shouldn't be happening - like, legally," Hejazi said. While the Cent marketplace "beta.cent.co" has paused NFT sales, the part specifically for selling NFTs of tweets, which is called "Valuables," is still active.

Hejazi highlighted three main problems: People selling unauthorized copies of other NFTs, people making NFTs of content that does not belong to them, and people selling sets of NFTs which resemble a security. He said these issues were "rampant," with users "minting and minting and minting counterfeit digital assets."

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