When the US warns of NFT digital art
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When the US warns of NFT digital art
The speculative tradingSLOTXOof works of art in the non-transferable token market, or “NFT” (NFT), has resulted in some works being highly valued and attractive to investors. But the rapidly growing, unregulated market has become a loophole for financial crimes. especially money laundering through high-priced digital art trading. that can slip through the eyes of regulators
Reuters reported that The US Treasury Department released a report Feb. 4, 2022, issuing a warning about the high-priced NFT-based digital art market. that could become a new form of money laundering which are linked to illegal financial activities such as financing terrorism
NFT is a unique form of digital asset. Many of the digital art works were converted to NFT format. which owners can trade speculatively, "Jeffries", the global investment bank This year, NFT's turnover will hit $35 billion.
However, the NFT market is a decentralized financial technology (Defi) that cuts out any middleware. This makes it not subject to the Anti-Money Laundering and Financing of Terrorism (AML/CFT) policies, which are practiced by financial institutions worldwide.
The NFT market therefore risks becoming an avenue for concealing the source of funds. and maintain the financial liquidity of criminals in conducting illegal financial activities
The US Treasury report states that “There is currently some evidence of money laundering in the high-value art market. But there is little evidence linking terrorist financial activities.” |
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