John Reed Stark criticized the NFT on Twitter, urging investors to stay away from non-interchangeable tokens. The former official called Twitter founder Jack Dorsey’s first tweet as NFT completely worthless, adding: bored monkeys wearing funny glasses and brightly colored hats can’t be considered a sound investment either. According to Stark, the NFT market is rigged, it is not controlled in any way, so it creates a favorable environment for manipulation.
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“NFTs are supposed to be completely decentralized. However, the image can easily be replaced if people with access to the servers change the file names,” Stark wrote.
Smart contracts for NFTs don’t promote clarity either, argues a former SEC official. The program code for smart contracts is not yet advanced enough to fully cover the terms and conditions that are typically spelled out in traditional contracts. That said, cryptocurrency platforms may not notify users of all terms and conditions, resulting in legal disputes.
“The NFT bubble is already bursting, despite the vast number of celebrities shamelessly selling JPEG pictures to their fans, convincing them that this is a prudent path to financial success. No matter what Paris Hilton and other celebrities promise, buying collectible tokens is as absurd as buying a boulder in a cardboard box,” Stark continued to expose.
The former official believes the NFT market is not overseen by regulators: it is not subject to net capital requirements, and token issuers are not required to be licensed and audited. Therefore, consumers cannot expect to have their rights protected. As Stark puts it, the NFT is not just the Wild West, but a global post-apocalyptic anarchy in a world of finance. Buying NFT is only for fun, it is pointless to hope that such an investment will bring a profit in the future.
The former official previously expressed skepticism about stablecoins as well, calling USDT a house of cards that lacks a legal framework capable of properly regulating Tether.