In its first risk assessment report analyzing illegal finance and non-fungible tokens (NFTs), the U.S. Department of the Treasury stated that although NFTs are rarely used to finance terrorist activities, they can easily lead to fraud and criminals will use NFTs to money laundering. The agency believes that relevant authorities should consider developing rules or guidelines for NFTs.
The U.S. Treasury Department said in a statement:
"The assessment found that NFTs are highly susceptible to fraud and fraud, and are easily stolen. The report determined that criminals can use NFTs to launder the proceeds of predicate crimes, and often use them in conjunction with other means to conceal illegal criminal proceeds. Source. It also found little evidence so far of NFT misuse by terrorists or proliferators, as opposed to scammers.”
The Treasury noted that most money laundering and terrorism financing occurs through fiat currencies, but also highlighted fraud and money laundering taking place in the NFT space. The agency stated:
“Criminals often try to quickly sell or trade stolen or illegally obtained NFTs to avoid tracing, mask the source of the NFT, or make it difficult for NFT platforms, blockchain analysis companies, and law enforcement to track the location of the NFT and illegal sales profits. In addition, law enforcement It has been observed that criminals often take advantage of the fact that many NFT platforms do not require customer information.”
The Treasury Department also said that the NFT market is also "particularly vulnerable to fraud and fraud," citing cases of "rug pulls" scams and false sales that have occurred in the past few years.
Copyright and Trademark Issues with NFTs
The U.S. Department of the Treasury also pointed out in the report that criminals may distort the actual rights that NFTs may actually convey, especially the assets or access rights referenced by NFTs. “Criminals may also violate copyright and trademark protection to promote NFTs. These methods may It will increase the price of NFT."
The Treasury recommends that "relevant authorities" consider developing rules or guidance for NFTs in an effort to "provide further clarity on existing obligations applicable to NFT platforms." The agency stated:
“For example, digital asset-related guidance, warnings, recommendations and other information may be able to illustrate how existing regulations and guidance apply to NFTs and NFT platforms. Private sector communication can also increase awareness of relevant regulatory obligations and may help to increase Number of compliant NFT platforms.
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This article U.S. Treasury Department says NFTs are vulnerable to fraud and recommends regulations to provide clarity first appeared on Zombit.
