June 23, 2024

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UK expert panel identifies money laundering risks in NFTs

In its report, the Royal United Services Institute calls NFTs a “new frontier” for money laundering (Image: Pixabay / klimkin)

According to Decrypt, in a statement released yesterday (2), the Royal United Services Institute (RUSI) cited some risks associated with money laundering in the non-fungal tokens market (NFTs, Abstract in English).

In the document, the company asks whether NFTs have become the “new frontier” for money laundering.

RUSI has indicated in its report that NFTs are mostly purchased Cryptocurrencies On online sites. However, often “cryptocurrencies are used for malicious purposes such as covering up the appearance of money associated with crime”.

The company also said that NFTs could be exploited by money-laundering agents, just like what is happening in the traditional art market, according to Decrypt.

In this regard, RUSI pointed out:

Criminal agents can hack user accounts on NFT platforms and transfer these tokens to their own accounts. The hacker will then quickly sell the stolen NFTs and try to clean up the money received.

However, according to Decrypt, the company has identified potential new risks. One is the concealment of information within tokens, which may theoretically be about software vulnerabilities.

But in practice, the token can be used as a transfer medium to share this information between criminal agents.

Is there a solution to money laundering in NFTs?

According to RUSI, a viable alternative to solving or reducing fraud through NFTs is to use the same regulatory framework as for cryptocurrency brokers for online auctions of these tokens.

In the document, the company emphasizes the need to establish a common platform for companies seeking to participate in the world of NFTs, which include user knowledge policies (KYC) and continuous monitoring.

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RUSI also pointed to another possible solution: creating a record of stolen or fraudulent NFTs, similar to what happens with the Art Laws Register in the traditional art world, as a database of stolen artwork. Criminal activities.