“Plagiarism” and “wash trading” issues forced NFT marketplace to suspend sales
The NFT scene has become replete with issues bothering on plagiarism, wash trading and a number of other “legal” issues despite its growth.
The foremost NFT platform, The Cent, has announced the suspension of sales of the blockchain-backed digital arts for the time being.
The decision to stop most of its transactions was made after details emerged that some individuals were engaged in fraudulent activities on the platform.
NFT marketplace pauses sales
To be precise, bad actors were taking advantage of the anonymity offered by the space to sell items that were not theirs.
The Cent came to the limelight when it sold the screenshot of Twitter’s first tweet for millions. The platform was one of the very first marketplaces to record a transaction that attracted major attention across the space and also drew the first known million-dollar NFT sales.
While the NFT space has since grown to become an integral part of the wider crypto industry, it has also cemented itself as a behemoth in its own right as it recorded a surge in its growth and interest despite the wider crypto market crash in January.
However, reports and indications have emerged that the NFT space has become replete with scams, counterfeits, and “wash trading.” A recent Chainalysis report revealed the extent of the rot in the NFT space.
Speaking on this, the CEO and co-founder of The Cents labeled it a “fundamental problem” while also adding that:
“there is a spectrum of activity that is happening that basically shouldn’t be happening — like, legally,”
He continued that the problems the platform was selling could be split into three categories; the first category is the fact that some people are selling unauthorized copies of other people NFTs, the second category are those making NFTs of other people works, and lastly, those selling NFTs which could be classified as a security.
This has forced the Cent marketplace “beta.cent.co” to pause its NFT sales option temporarily; however, the sales of NFT tweets are still very much active.
The UK seizes 3 NFTs
In another development, the UK’s foremost tax authority, Her Majesty’s Revenue and Customs (HMRC) have seized three NFTs as part of a probe into a suspected VAT fraud involving 250 alleged fake companies.
Authorities revealed that three people were also arrested on suspicion of attempting to defraud it of £1.4m while adding that this was the first time that law enforcement in the country would be seizing the digital tokens.
Speaking on the arrest, HMRC deputy director Nick Sharp revealed that the seizures would deter others from hiding their assets from the tax authorities.
The issue of taxation has become a very cogent issue in the crypto industry due to the different regulations guarding the space in different countries. While many are looking to tax the burgeoning space, others are yet to make their intentions known.