Hejazi highlighted three main problems: people selling unauthorised copies of other NFTs, people making NFTs of content which does not belong to them, and people selling sets of NFTs which resemble a security.
he biggest NFT marketplace, OpenSea, valued at $13.3 billion after its latest round of venture funding, said last month more than 80% of the NFTs minted for free on its platform were "plagiarized works, fake collections and spam".
LONDON, Feb 11 (Reuters) - The platform which sold an NFT of Jack Dorsey's first tweet for $2.9 million has halted most transactions because people were selling tokens of content that did not belong to them, its founder said, calling this a "fundamental problem" in the fast-growing digital assets market.
Reports of scams, counterfeits and "wash trading" have become commonplace.
He said these issues were "rampant", with users "minting and minting and minting counterfeit digital assets".
While Cent, with 150,000 users and revenue "in the millions", is a relatively small NFT platform, Hejazi said the issue of fake and illegal content exists across the industry.
But Hejazi said his company was keen on protecting content-creators, and may introduce centralised controls as a short-term measure in order to re-open the marketplace, before exploring decentralised solutions.
Toughts & Comments
The economic impact (dollar value) of Crypto fraud is already more than 2/3rds of the impact of Credit Card fraud. NFTs are the new wrinkle in that fabric. IMO Things will get a lot worse in the NFT space before they get better.