NFT marketplace Cent temporarily halts most trading due to ‘widespread fraud’: Digital Photography Review

Cent’s logo.

Cent, a non-fungible token (NFT) marketplace known for selling an NFT of the first tweet from former Twitter CEO Jack Dorsey for the equivalent of $2.9 million USD, has announced it is halting most of its transactions on account of ‘widespread fraud.’

This is an issue that also plagues the leading NFT marketplace, OpenSea, currently valued at $13.3 billion, who recently revealed that at least 80% of the items traded on its platform are either plagiarized or fake. Cent’s CEO and co-founder Cameron Hejazi tells Reuters that his company, as of February 6th, has temporarily stopped allowing its users to buy and sell NFTs.

‘There’s a spectrum of activity that is happening that basically shouldn’t be happening – like, legally,’ Hejazi says. The three problems, in his estimation, are people selling unauthorized copies of NFTs, creating content that doesn’t belong to them, and selling NFTs that represent a security.

While Cent has halted most of its trading, ‘Valuables’ can still be bought and sold as NFTs.

An NFT is a unique digital asset that lives on blockchain technology. It can be a music clip, video, animation, digitized artwork, photo or even a ticket to an event, such as a movie, that took place at a specific time. What’s notable about NFTs is that they prove ownership. You can read about the impact they’ve had on photography in our extensive article.

Cent is still allowing allowing the sales of Tweets as NFTs. These are known on the platform as ‘Valuables’. Still, Hejazi likens the illegal activity happening on his platform, which boasts roughly 150,000 users, to a game of whack-a-mole. ‘Every time we would ban one [account], another one would come up, or three more would come up’.

Sales of NFTs exceeded $25 billion in 2021. Major brands including Visa and Adidas are on board while trillion-dollar investment management firm BlackRock recently filed an application with the Securities and Exchange Commission (SEC) for a blockchain exchange-traded fund. Nevertheless, Cent CEO Hajazi likens all this NFT activity to ‘money chasing money’.