Why should law enforcement and compliance officers take notice of the NFTs?

Blockchain Intelligence Group | Crypto Investigations Platform

Despite all the opportunities that NFT presents, its rapid growth has brought a list of issues and intricacies relevant to law enforcement and compliance officers.

 

The current NFT market environment is especially conducive for money laundering as nobody would question why someone is buying a JPEG file for millions of dollars. In their recent draft guidance on virtual assets and virtual asset service providers, the global anti-money laundering watchdog FATF classified NFTs that facilitate money laundering and terrorist financing as virtual assets. The fact that NFTs are already on the regulators’ radar has vast implications for the space. If NFT marketplaces wish to reduce the imminent risk of a crackdown, they need to adopt at least some form of due diligence.

 

Intellectual property theft has been rampant in the NFT space. NFTs current boom is attracting bad actors who tokenize artwork they don’t own to profit from them. Some of these bad actors have deployed bots to create NFTs. An example of this is the @tokenizedtweets bot which tokenizes a tweet without alerting its owner.

 

Hacks and thefts in cryptocurrency are notorious. NFTs are no different. Recently, Users of Nifty Gateway fell victim to a hack. Albeit only affecting users who didn’t activate two-factor authentication, the hack came as a reminder that this space is not free from the dangers of such malicious attacks.

 

Recent NFT highlights:

 

 

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Beeple’s collage, “Everydays: The First 5000 Days” sold at Christie’s.

 


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