Despite The Crypto Bear Market, Moonpay Continues To Expand Into NFTS

Taiwan Central Bank Warns Public of Using NFTs as Investment Vehicles

  • Stating multiple reasons, the Central bank of Taiwan has cautioned the public against the use of NFTs to make financial investments.

The Central Bank of the Republic of China (Taiwan) has warned locals against the use of non-fungible tokens (NFTs) as investment tools.

According to local news reports, the bank said the NFT market is swarming with fake transactions. It also cited a recent survey, which said only 28.5% of people flipping NFTs made a profit. Even more, buyers are rarely ever interested in a third of NFTs minted.

Just a week ago, blockchain monitoring software company DEXterlab released the results of a similar survey. Out of the 1,300 people polled, less than 42% had managed to make a profit from selling NFTs. And in May, pseudonymous NFT creator Azuki opened up about having developed several other NFT projects which went up in smoke.

Taiwan Bank Against Investing in NFTs

As for fake transactions, multiple cases of wash trading have made headlines in the past. Blockchain analysis firm Chainalysis reported in February that NFT wash traders made a whopping $8.9 million worth of profits in 2021. Insider trading, which could also amount to wash trading, was also confirmed to have occurred at lead NFT marketplace OpenSea. The propagating employee (the company’s head of product) was subsequently fired, arrested, and charged with insider trading.

The Taiwan bank is also doubtful about NFT ownership, saying anyone can produce or copy NFTs. The institution also notes that almost anything can qualify for an NFT, including GIFs, JPEGs, and videos. Last year, YouTube personality Logan Paul was accused of ripping off Adobe stock images. Paul photoshopped the company’s animal-themed images into his pictures, developing what he called the CryptoZoo NFT project. Aside from these reasons, the bank is also convinced digital collectibles can be utilized in data theft.

The Good and The Bad

NFT hype skyrocketed last year when the artist Beeple sold one of his paintings for $69 million. That year, NFT buyers rose to a total of 2.3 million, from just 75,000 in 2020. The total valuation of the NFT market also surged 21,000%, from $82 million to $17 billion. And as of May 1, 2022, NFT transactions hit $37 billion, while the whole of last year saw $40 billion.

As investors injected funds to support the industry, innovators found new ways to make use of NFTs – such as in DNA records.

But like anything that gains traction that fast, bad actors found a playground in the NFT industry. Other than the aforementioned challenges, NFTs have also been prone to theft. This month, the Bored Ape Yacht Club discord got hacked, and perpetrators made away with three NFTs, and 200 Ethereum (ETH) tokens.

NFTs have also not been immune to the recent crypto market downturn. According to Chainalysis, only 491,000 accounts were trading NFTs in May, down from 1 million in January.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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