US Treasury publishes study on NFTs

The US Department of the Treasury recently published an investigation highlighting the potential of non-fungible tokens (NFTs) for illicit money laundering and terrorist financing operations, among others.

The research, called “Study on the facilitation of money laundering and the financing of terrorism through the trade in works of art”, indicates that the increase in the use of art as an investment could create a vulnerability in money laundering.

“The emerging online art market may present new risks, depending on the structure and incentives of certain activity in this sector of the market (i.e. the purchase of NFTs, digital units on an underlying blockchain that may represent ownership of a digital work of art)”, says part of the study.

The Treasury Department research also speaks to the importance of tokens to represent ownership of digital and physical assets that are managed and controlled through smart contracts and digital wallets. The Treasury also notes that the price of NFTs is determined by the buyer and seller and not the market.

“According to US authorities, in the first three months of 2021, the NFT market generated a record $1.5 billion in transactions and grew 2,627 % from the previous quarter.”

K. Tovar

Source: Cointelegraph