NFT Platform Cent stops operations following Scams and Fraud

Cent, the platform responsible for selling and NFT of Jack Dorsey’s first tweet, has halted several transactions due to reports of theft and fraud. The platform’s founder notes that these issues are a “fundamental problem” in the growing digital assets market.

According to several traders and NFT communities, scams, counterfeits, and wash-trading have become commonplace occurrences.

Cent gained fame as it executed one of the first known million-dollar NFT sales when it sold Dorsey’s tweet last March. However, as of Feb. 6, CEO and co-founder Cameron Hejazi announced that the platform has stopped allowing buying and selling.

“There’s a spectrum of activity that is happening that basically shouldn’t be happening — like, legally,” Hejazi said.

While the marketplace has paused its NFT sales, the section specifically for selling NFTs of tweets is still active.

Hejazi highlights three main issues when dealing with digital assets. These issues are 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 security.

He claims that these problems are “rampant” with users “minting and minting and minting counterfeit digital assets.”

“It kept happening. We would ban offending accounts but it was like we’re playing a game of whack-a-mole… Every time we would ban one, another one would come up, or three more would come up,” said Hejazi.

Cent is a relatively small platform in the NFT space with about 150,000 users and revenue in the millions. Despite this, Hejazi believes that Cent’s problems exist throughout the industry. “I think this is a pretty fundamental problem with Web3,” he said.

After being valued at $13.3 billion, OpenSea reports that over 80% of NFTs minted for free were “plagiarized works, fake collections, and spam.”

The platform initially tried to limit the number of NFTs users could mint for free, but reversed this decision following the backlash from its users. “It is against our policy to sell NFTs using plagiarized content,” an OpenSea spokesperson said.

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

Source: CNN Business