A slew of celebrity endorsements helped inflate a multi-billion dollar bubble around digital tokens over the past year, but cryptocurrencies are crashing and some fear NFTs could be next.
NFTs are tokens linked to digital images, “collectable” items, avatars in games or property and objects in the burgeoning virtual world of the metaverse.
The likes of Paris Hilton, Gwyneth Paltrow and Serena Williams have boasted about owning NFTs and many under-30s have been enticed to gamble for the chance of making a quick profit.
But the whole sector is suffering a rout at the moment with all the major cryptocurrencies slumping in value, and the signs for NFTs are mixed at best.
The number of NFTs traded in the first quarter of this year slumped by almost 50 percent compared to the previous quarter, according to analysis firm Non-Fungible.
They reckoned the market was digesting the vast amount of NFTs created last year, with the resale market just getting off the ground.
Monitoring firm CryptoSlam reported a dramatic tail-off in May, with just $31 million spent on art and collectibles in the week to May 15, the lowest figure all year.
A symbol of the struggle is the forlorn attempt to re-sell an NFT of Twitter founder Jack Dorsey’s first tweet.
Dorsey managed to sell the NFT for almost $3 million last year but the new owner cannot find anyone willing to pay more than $20,000.
– The year of scams –
Molly White, a prominent critic of the crypto sphere, told AFP there were many possible reasons for the downturn.
“It could be a general decrease in hype, it could be fear of scams after so many high-profile ones, or it could be people tightening their belts,” she said.
The reputation of the industry has been hammered for much of the year.
The main exchange, OpenSea, admitted in January that more than 80 percent of the NFTs created with its free tool were fraudulent — many of them copies of other NFTs or famous artworks reproduced without permission.
“There’s a bit of everything on OpenSea,” said Olivier Lerner, co-author of the book “NFT Mine d’Or” (NFT Gold Mine).
“It’s a huge site and it’s not curated, so you really have no idea what you’re buying.”
LooksRare, an NFT exchange that overtook OpenSea for volume of sales this year, got into similar problems as its rival.
As many as 95 percent of the transactions on its platform were found to be fake, according to CryptoSlam.
Users were selling NFTs to themselves because LooksRare was offering tokens with every transaction — no matter what you were buying.
And the amounts lost to scams this year have been eye-watering.
The owners of Axie Infinity, a game played by millions in the Philippines and elsewhere and a key driver of the NFT market, managed to lose more than $500 million in a single swindle.
– ‘Like the lottery’ –
“As soon as you have a new technology, you immediately have fraudsters circling,” lawyer Eric Barbry told AFP.
He pointed out that the NFT market had no dedicated regulation so law enforcement agencies are left to cobble together a response using existing frameworks.
Molly White said strong regulation could help eliminate the extreme speculation but that could, in turn, rob NFTs of their major appeal — that they can bring quick profits.
“I think less hype would be a good thing — in its current form, NFT trading is enormously risky and probably unwise for the average person,” she said.
NFTs are often likened to the traditional art market because they have no inherent utility and their prices fluctuated wildly depending on trends and hype.
But Olivier Lerner suggested a different comparison.
“It’s like the lottery,” he said of those seeking big profits from NFTs. “You play, but you never win.”
US vows enforcement as ban on Xinjiang imports takes effect
The United States on Tuesday promised enforcement as a landmark ban took effect on most imports from Xinjiang, the Chinese region where rights groups report the Uyghur people are being forced into slave labor.
The Uyghur Forced Labor Prevention Act, which will be felt especially in the textile industry, took effect six months after it was signed into law by President Joe Biden following bipartisan support in Congress.
“We are rallying our allies and partners to make global supply chains free from the use of forced labor,” Secretary of State Antony Blinken said in a statement.
The US Customs and Border Protection service, which will enforce the new law, issued guidance that said it would presume products from Xinjiang involve forced labor and are therefore banned unless businesses can document otherwise.
The act “requires that importers demonstrate due diligence, effective supply chain tracing and supply chain management measures to ensure that they do not import any goods made, in whole or in part, by forced labor,” its advisory said.
It said it would look at the complete supply chain and not exempt goods shipped from other parts of China or third countries.
An estimated 20 percent of garments imported into the United States each year include some cotton from Xinjiang, according to labor rights groups.
The vast western region is also a major center of tomatoes canned for export.
Senator Marco Rubio, a Republican hawk who teamed up with liberal Democrats to push for the legislation, called the act “the most significant change in America’s relationship with China since 2001.”
“No longer will we look at images of bareheaded prisoners in shackles and blindfolds, lined up like animals for slaughter, and shrug,” he wrote in an opinion piece for Real Clear Politics.
Omer Kanat, executive director of the Uyghur Human Rights Project, called the law a “huge win” for the movement and said it would push other governments to take similar action.
Rights groups, citing witness accounts, say that well more than one million Uyghurs and other predominantly Muslim Turkic-speaking people have been locked up in re-education camps in a bid to integrate them forcibly into China’s Han majority.
Beijing denies the charges and says it is providing vocational training to reduce the allure of Islamist extremism following violence.
US high court denies Bayer bid to block Roundup weedkiller lawsuits
The US Supreme Court on Tuesday declined to hear a bid from Bayer-owned Monsanto that aimed to challenge thousands of lawsuits claiming its weedkiller Roundup causes cancer — a potentially costly ruling.
The high court did not explain its decision, which left intact a $25 million ruling in favor of a California man who alleged he developed cancer after using the chemical for years.
The decision marks a major blow to the German conglomerate’s legal fight against Roundup-related cases, and Bayer has set aside more than $15 billion to deal with a wave of US lawsuits linked to the weedkiller.
“Bayer respectfully disagrees with the Supreme Court’s decision,” the company said in a statement.
“The company believes that the decision undermines the ability of companies to rely on official actions taken by expert regulatory agencies,” it added, referring to a 2020 federal finding that Roundup’s active ingredient is not risky.
Bayer has been plagued by problems since it bought Monsanto, which owns Roundup, in 2018 for $63 billion and inherited its legal woes around the chemical’s ingredient glyphosate.
The German firm says it has not committed any wrongdoing, and maintains that scientific studies and regulatory approvals show glyphosate is safe.
Glyphosate is nonetheless classified as a “probable carcinogen” by the International Agency for Research on Cancer at the World Health Organization (WHO).
– Billions in claims –
However, the United States Environmental Protection Agency, on its website, says “there are no risks of concern to human health when glyphosate is used in accordance with its current label.”
The Supreme Court’s decision not to intervene leaves in place Monsanto’s appellate conviction in the lawsuit filed by Edwin Hardeman, who was diagnosed with non-Hodgkin’s lymphoma in 2015.
In addition to the some 30,000 cases about health problems allegations against the weedkiller, Bayer’s own shareholders have taken legal action as well.
Investors are seeking 2.2 billion euros ($2.5 billion) in damages in a German court for losses incurred following its troubled takeover of Monsanto, their lawyers said in January.
The investors accuse Bayer of having “misled capital markets about the economic risks from pending consumer lawsuits in the United States in connection with glyphosate and the herbicide Roundup,” law firm Tilp said in a statement.
Tilp said around 320 investors have submitted complaints, most of them institutional investors such as banks, wealth managers, insurers and pension funds.
Some three-quarters of the claims targeting Roundup originate with residential consumers, and not large-scale farmers.
Bayer executives have argued that its agricultural users know the proper use of the product better than residential ones.
The firm said it is transitioning its glyphosate-based products in the US residential market to new formulations that have alternative active ingredients beginning in 2023.
“The company is taking this action exclusively to manage litigation risk in the US and not because of any safety concerns,” it said in a statement.
Bayer says it has resolved around 107,000 of a total of 138,000 cases related to the herbicide.
Bayer’s share price was down just under two percent after the court’s decision on Tuesday.
Ecuador military calls Indigenous protests a ‘grave threat’
Thousands of Ecuadorans took to the streets Tuesday for a ninth day of Indigenous-led fuel price protests, as the military vowed to defend the country’s democracy against what it called a “grave threat.”
Called by the powerful Confederation of Indigenous Nationalities of Ecuador (Conaie), the demonstrations have seen roads barricaded countrywide, cost the economy tens of millions of dollars and left dozens injured.
“Ecuador’s democracy faces a grave threat from the concerted actions of… people who are preventing the free movement of the majority of Ecuadorans,” Defense Minister Luis Lara told a press conference, flanked by the heads of the army, navy and air force.
The armed forces, he warned, “will not allow attempts to break the constitutional order or any action against democracy and the laws of the republic.”
Conaie — credited with helping topple three presidents between 1997 and 2005 — called the demonstrations as Ecuadorans increasingly struggle to make ends meet.
Indigenous people comprise more than a million of Ecuador’s 17.7 million inhabitants and wield much political clout, but are disproportionately affected by rising inflation, unemployment and poverty exacerbated by the coronavirus pandemic.
– 10 Demands –
Thousands of protesters entered Quito from the south and north on Monday, on foot and on the backs of trucks, to reinforce protesters in the capital, where they burnt tires and tree branches in the streets — and were back out in the streets on Tuesday morning.
At least some in the crowd, many wielding sticks and others draped in the Ecuadoran flag, or carrying children in their arms, said the president’s ouster was precisely what they sought.
“We are the people and we will stay here until the end,” Victor Taday, a 50-year-old Indigenous resident of Quito originally from Chimborazo province, told AFP Monday night — as similar marches took place in other parts of the country.
It was time for Lasso to “go away,” he said.
Fuel prices have risen sharply since 2020, almost doubling for diesel from $1 to $1.90 per gallon and rising from $1.75 to $2.55 for gasoline.
Conaie is demanding a price cut to $1.50 a gallon for diesel and $2.10 for gasoline.
It also wants jobs, food price controls and a commitment to renegotiating the personal bank loans of about four million families.
The movement has since been joined by students, workers and other Ecuadorans also feeling the economic pinch.
Police said Monday 63 armed forces personnel have been wounded in clashes and 21 others briefly held hostage since the protests began, while human rights observers reported 79 arrests and 55 civilians wounded.
President Guillermo Lasso extended a state of emergency to cover six of the country’s 24 provinces, with a night-time curfew in the capital Quito, as he sought to curtail the countrywide show of anger.
The state of emergency empowers Lasso to mobilize the armed forces to maintain order, suspend civil rights and declare curfews.
Conaie has vowed to maintain its blockade until the government meets 10 demands.
– ‘They seek chaos’ –
The president, a former banker in power since May 2021, said in a video on Twitter Monday that the protesters “do not want peace” and have rejected government calls for dialogue.
“They seek chaos. They want to eject the president,” he charged.
Ecuador’s parliament Monday evening voted 81 to 56 in favor of a resolution demanding the government conduct a “serious, clear and honest” dialogue with the protesters.
It proposed the convening of a “round table” of talks including the UN, Red Cross, universities and the powerful Catholic Church to find a solution to the stalemate.
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