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The NFT marketplace ‘Cent’ has been forced to “pause” its sales activities pretty much entirely after CEO Cameron Hejazi was forced to admit that “there’s a spectrum of activity that is happening that basically shouldn’t be happening — like, legally.” Reuters explained. In a community update to Cent’s user base that he became aware “bad actors” were using the service in order to create or ‘mint’ fraudulent, counterfeit NFTs, selling copies of already existing NFTs they didn’t own or creating them using content they didn’t own in the first place.
Hejazi wrote, “Recently, on our network, we’ve seen people taking others’ work and re-minting it using our services. We believe these people are bad actors, who only engage with Cent for the purpose of tricking others into purchasing counterfeit work. We do not condone this behavior – ethically, legally, and philosophically, it goes against our values and what we stand for as a company.
Our response has been to ban the offending accounts, but we believe that this approach is not sustainable. That’s why, effective today, we’re removing the ability to sell NFTs here. Our intent is to make this limitation temporary until we can rollout a strategy to overcome the challenges we’re facing. In the meantime, you can continue to freely mint and transfer posts.”
Evidently This Is Just An NFT Problem
He went on to point out that due to the industry being in its infancy “there is no industry wide standard for counteracting bad behavior.” Even by comparing the possible courses of actions with other NFT providers such as Nifty Gateway or OpenSea restricting who can use the service or “play(ing) whack-a-mole weeding out bad actors” Hejazi wrote that nothing seemed to fit his community’s needs.
Elizabeth Howcroft wrote for Thompson Reuters,
“Such problems may come into greater focus as major brands join the rush towards the so-called “metaverse”, or Web3. Coca-Cola (KO.N) and luxury brand Gucci are among companies to have sold NFTs, while YouTube said it will explore NFT features.
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.
“I think this is a pretty fundamental problem with Web3,” he said.”
Sure enough, OpenSea, the largest platform valued at $13.3 Billion tweeted that about 80% of everything created using their tool were “plagiarized works, fake collections, and spam.” For NFTs it seems to be par for the course at this point.
However, we've recently seen misuse of this feature increase exponentially.
Over 80% of the items created with this tool were plagiarized works, fake collections, and spam.— OpenSea (@opensea) January 27, 2022
