Today, the U.S. Department of the Treasury released the 2024 Non-fungible Token (NFT) Illicit Finance Risk Assessment. This assessment examines the vulnerabilities of NFTs and NFT platforms that can be exploited by illicit actors for activities such as money laundering, terrorist financing, and proliferation financing.
The assessment reveals that NFTs are highly prone to fraud, scams, and theft. It concludes that illicit actors can utilize NFTs to launder money from criminal activities, often combining them with other methods to hide the illicit origin of funds. However, there is little evidence of NFTs being misused by terrorists or proliferators, unlike fraudsters, up to this point.
“This risk assessment underscores the Treasury’s dedication to analyzing the illicit finance risks of emerging technologies and sharing these insights with industry and law enforcement,” stated Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “I urge the private sector to leverage the findings of this assessment to enhance their risk mitigation strategies and prevent the exploitation of NFTs and NFT platforms by illicit actors.”
The assessment also highlights that inadequate cybersecurity measures, issues related to copyright and trademark protections, and the hype and volatile pricing of NFTs can facilitate fraud and theft. Furthermore, some NFT firms and platforms lack adequate controls to ensure market integrity and to prevent money laundering, terrorist financing, and sanctions evasion. Nonetheless, the assessment notes that mitigation measures such as industry tools, law enforcement capabilities, and analysis of public blockchain data can help reduce these risks.
To address these ongoing risks, the assessment recommends several actions for the U.S. government, including:
- Raising industry awareness of existing obligations
- Continuing enforcement of current laws and regulations related to NFTs and NFT platforms
- Considering the further application of regulations to NFTs and NFT platforms
This NFT risk assessment fulfills the Treasury’s commitment to publishing such an assessment as part of the 2022 Digital Asset Action Plan to Address Illicit Finance Risks. It also builds on recent National Risk Assessments and the 2023 Illicit Finance Risk Assessment on Decentralized Finance, all published by the Treasury Department.
Click here to read the “Non-fungible Token Illicit Finance Risk Assessment.”
By FCCT Editorial Team freeslots dinogame telegram营销
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