The US Treasury Conducted a Financial Risk Assessment of NFTs
Date: 2024-05-30 Author: Henry Casey Categories: IN WORLD
The US Department of the Treasury recently published a report analyzing the potential financial risks associated with non-fungible tokens (NFTs). In the report, the department pays special attention to the possibility of using NFTs to commit fraud and other illegal activities.
Financial Risks and Fraud
The US Treasury has identified many problems associated with the NFT market. In particular, the department notes that non-fungible tokens can be used to finance terrorism, theft, nuclear proliferation and participation in other illegal schemes. The Treasury emphasizes that:
“Illicit actors can use NFTs to launder the proceeds of a variety of crimes, often in combination with other methods to hide illicit funds.”
Lack of Control on NFT Marketplaces
The report also points to a lack of "adequate controls" on platforms where NFTs are traded. This creates conditions for money laundering and sanctions evasion. In this regard, the Ministry of Finance recommends the introduction of regulatory rules to regulate the activities of NFT marketplaces.
Unique Risks Associated with NFTs
The Ministry of Finance came to the conclusion that most scammers use traditional schemes that existed even before the advent of blockchain and cryptocurrencies. However, some NFT transactions involve actions unique to digital assets, such as smart contract manipulation.
Recommendations from the Ministry of Finance
At the end of the report, the US Treasury offered several recommendations to reduce abuses in the NFT market. Among them:
1. Regulation of the NFT market: Introducing clear regulatory rules for platforms trading non-fungible tokens.
2. Working with Industry Insiders: Collaborate with experts and key market players to prevent fraud.
3. International cooperation: Interaction with foreign partners to prevent illegal geopolitical activities.
4. Consumer Education: Educate users about the potential risks associated with NFTs and other digital assets.
Conclusion
This report from the US Treasury is the first time that the department has examined the financial risks associated with NFTs in such detail. The assessment and recommendations aim to create a safer and more transparent environment for trading digital assets, while also protecting consumers from potential abuse.
We previously reported that the new NFT collection from Yuga Labs studio was criticized by the community. Users criticized the idea of the project, calling it ridiculous.
