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Counterfeit NFTs Forces Marketplace To Shut Down: Report

Counterfeit NFTs force marketplaces to shut down and one of the platforms famous for minting Jack Dorsey’s first tweet stopped operations amidst illicit activity calls so let’s read further in today’s latest cryptocurrency news.

The rampant issues relating to minting counterfeit NFTs forced popular platform Cent to stop all operations. Founded in 2017, CENT started off as an asocial network and platform for creative experimentation. In 2020 the team launched an NFT platform dubbed Valuebles to mint iconic tweets from popular users. Jack Dorsey’s first tweet was already sold for $2.9 million on the platform and then but now counterfeit NFTs forced the marketplace to shut down. The founder of Cent Cameron Hejazi noted:

“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 said that the issue was threefold as the sale of unauthorized NFTs occurred and the sale of stolen content was converted into NFTs so the sales of the NFTs resembled securities. Amidst the money laundering concerns, the first NFT seizure in the UK VAT fraud case shows that this sector has had a rough start in 2022. The CEO of Kryptomon Umberto Canessa Cerchi said that the growing reputation concerns are a huge concern for the industry and it is not enough to put off potential first time NFT 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.”

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Cerchi even shared that the consumer protection laws could actually improve the situation and better the education that can prevent the industry from becoming a fraud victim. A brand strategist from Blockasset.co Phil Gunwhy, is also the first athlete-verified NFT sports platform, is quite optimistic about the future of regulating this sector:

“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.”

He added that developing regulations, it does mean we will face challenges in the short term but there’s an expectation that this can trickle down to the NFT ecosystem. The US Treasury took aim at money laundering and NFTs and there could even be more scrutiny to come so ultimately Hejazi hopes to open an industrywide conversation in order to root out the offenders.

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