Intro
An NFT refers to a unit of data store on the blockchain and can be sell and relocate. The NFT can be link to a specific digital or physical asset or a license for that asset. NFT’s are not like other Cryptocurrencies such As bitcoin. They are not interchangeable, not fungible, and each has a specific value. In order to clean dirty money, someone can make an NFT, put it up for sale on the blockchain, and buy it from themself. This digital wallet isn’t regulate and considers legitimate money from the NFT market. This article will explain the news report about the recent money laundering activities with the help of NFT.
NFT & Money Laundering
Non-fungible tokens (“NFTs”) have seen a surge in interest and value over the last year. The complexities of NFTs may be challenging to understand, but at their core, they are nothing more than a way for people to buy and sell digital artwork anonymously. Because of the anonymity provided by this new technology, an environment conducive to money laundering is establish.
NFTs’ value is highly individualize due to their artsy environment. A person’s willingness to pay for an NFT determines its price. With the exception of traditional artwork, in which an artist might work for weeks on a single sheet, numerous NFTs can be form in minutes. This saves both time and money. For instance, at a Sotheby’s auction in April 2021. An NFT know as The Pixel is sell for approximately 1.3 million dollars.
But since NFTs are bought and sold with digital currencies, the process of tracking these transactions becomes even more difficult. Virtual currencies have been implicated in a wide range of fraud schemes over the past few years. But perhaps none more so than money laundering, says the ACFE’s 2021 Fraud Examiners Manual. “To make it more difficult for fraud examiners or law enforcement to track down the source of the illicit funds, the cash flows of criminal activity are first converted to cryptocurrency and then transferred through a complicated series of transactions across multiple wallets.”
FinalWord
However, despite the fact that Congress is pass only a limited amount of NFT legislation to date. The National Defense Authorization Act is passing, including the Anti-Money Laundering Act of 2020 (AMLA). A provision of the AMLA states that the United States Treasury Department must “study the significant expansion of prerequisites to people engaged in the art trade”. Which could include non-financial institutions (NFIs). The Financial Action Task Force has issued extra guidance to handle money laundering. And terrorist funding with the help of virtual assets.
