The U.S. Department of the Treasury targets NFTs for potential high-value art money laundering

The U.S. Department of the Treasury released a study on the high-value art market, highlighting the potential in the nonfungible tokens (NFT) space to conduct illicit money laundering or terror financing operations.

The treasury’s “Study of the facilitation of money laundering and terror finance through the trade in works of art” suggested that the increasing use of art as an investment or financial asset could make the high-value art trades vulnerable to 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 can represent ownership of a digital work of art).”

The study underlines the importance of NFTs in representing ownership of the digital and physical property that is managed and controlled via smart contracts and digital wallets.

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