Despite its growth, the NFT market has become fraught with plagiarism, wash trading, and other “legal” issues.
For now, the leading Non-fungible Token marketplace, The Cent, has ceased sales of blockchain-backed digital arts. Following reports that some users were using the site to commit fraud, the firm halted most transactions.
To be more specific, bad actors used the anonymity provided by the site to sell products which were not theirs.
The Cent shot to fame after selling a screenshot of Twitter’s first tweet for millions of dollars. As one of the first in the area, it recorded the first known million-dollar Non-fungible Token purchase.
Despite the January crypto market crisis, the NFT area has become an essential part of the better crypto economy.
Furthermore, a recent Chainalysis report argues that the Non-fungible Token industry has become rife with scams, counterfeits, and “wash trading.”
According to The Cents’ CEO and co-founder, a wide range of illegal acts should not be occurring.
Additionally, he stated that the platform was tackling three issues:
- Selling illicit content from other people’s NFTs.
- Manufacturing NFTs of other people’s works.
- People selling NFTs classified as securities.
Accordingly, this has caused the Cent marketplace “beta.cent.co” to temporarily suspend its NFT sales option. Nevertheless, NFT tweet sales are still quite active.
In another development, Her Majesty’s Revenue and Customs (HMRC), the UK’s top tax office, has confiscated three NFTs. This is part of an investigation into a suspected VAT fraud involving 250 alleged bogus companies.
Moreover, authorities arrested three persons on suspicion of cheating the company out of £1.4 million. For the first time, law enforcement in the country seized digital tokens.
According to HMRC deputy director Nick Sharp, the seizures will deter others from hiding their property from tax authorities.
Taxation has been a significant issue in the crypto business due to numerous national regulations guarding space. While many are looking to tax the expanding industry, others have yet to announce their plans.