US Treasury Warns NFTs May Present New Illicit Finance Risks

US Treasury Warns NFTs May Present New Illicit Finance Risks

The U.S. treasury department has warned that non-fungible tokens (NFTs) may present new illicit finance risks. According to industry estimates, the NFT market could reach $35 billion in 2022 and more than $80 billion by 2025. NFTs May Present Illicit Finance Risks

The U.S. Department of the Treasury announced Friday the release of a “study on illicit finance in the high-value art market.” The study was mandated by Congress in the Anti-Money Laundering Act of 2020.

“This study examined art market participants and sectors of the high-value art market that may present money laundering and terrorist financing risks to the U.S. financial system,” the Treasury wrote, adding: The emerging digital art market, such as the use of non-fungible tokens (NFTs), may present new risks, depending on the structure and market incentives.

In order to combat the risks, the study recommends several options, including updating training for law and customs enforcement, enhancing private sector information sharing, and applying anti-money laundering and countering terrorism financing requirements to certain participants in the art market.

According to Dappradar, NFT sales volume totaled $24.9 billion in 2021, compared to $94.9 million in the previous year. Jefferies’ analysts have estimated that the market for NFTs could reach $35 billion in 2022 and more than $80 billion by 2025.

The rising popularity of NFTs has attracted scammers and caused concerns among regulators.

“Scams promising big returns on cryptocurrencies and NFTs are flooding the Internet,” T. K. Keen, administrator for the Division of Financial Regulation of the U.S. state of Oregon, warned in January. “Investors wanting to purchase cryptocurrencies and NFTs should do their homework to make sure they fully understand these investments and their risks before getting involved.” Tags in this story anti-money laundering, illicit finance, nft, Non-fungible tokens, US Treasury

What do you think about the Treasury’s warning about NFTs? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Russian Government to Present Regulatory Scenarios for Cryptocurrencies Within a Week, Report REGULATION | 15 hours ago US Lawmakers Introduce "Virtual Currency Tax Fairness Act" to Boost Cryptocurrency Use for Payments REGULATION | 1 day ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleMajor Exchange LBank Wishes Lunar New Year via NASDAQ Billboard on Times Square NYC Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRobinhood to Launch Crypto Trading Internationally — Sees "Immense Potential" in Crypto Economy

Robinhood has “set aggressive goals to start opening its crypto platform up to customers internationally in 2022,” the popular trading platform revealed during its Q4 earnings call. “The company believes in the immense potential of the crypto economy and sees ... read more.Russian Investors to Pass Exams Before Buying Cryptocurrencies, Draft Law Suggests Pop Star Justin Bieber Buys Bored Ape NFT for $1.29 Million, Pays More Than 300% Above Floor Ark Invest Expects Bitcoin to Exceed $1 Million by 2030 — Says BTC Could Transform Monetary History Judge Orders Argentinian Soccer Association to Drop Binance Deal