- The International Tax Enforcer J5 collab with the IRS warned people regarding the rising risk of money laundering on NFTs.
- The partnership’s primary goal is to combat crimes around NFTs.
- The biggest NFT marketplace facilitates over $3 billion a month of transactions and doesn’t presently confirm client identities.
As earlier reported by CoinQuora, world regulators have issued a new warning of the rising threats of money laundering and fraud in digital and non-fungible tokens (NFTs).
Further expounding on the frauds and money laundering surrounding NFT marketplaces, the head of J5 and deputy commissioner of the Australia Taxation Workplace stated:
This paper provides a suite of indicators that financial institutions can reference to help them identify illicit financial activity concerning NFTs.
In addition, Esteban Castaño, the founder and CEO of cryptocurrency analytics agency TRM Labs, said that considerations about cash laundering in NFTs are legit.
We have already seen nation states move assets into NFTs and move them back out. So it’s not a bogeyman–it’s real. It’s happening.”
Furthermore, Chainalysis, a New York-based crypto analytics firm, estimated that illicitly obtained funds–for instance, cash got by scams that later moved into NFTs – totaled $1.4 million within the final quarter of 2021.
Likewise, OpenSea, the dominant NFT market that facilitates about $3 billion in month-to-month transactions, doesn’t at present confirm clients’ identities by the “know your buyer” (KYC) checks. These KYC checks are commonly required in banking and different monetary companies.
Meanwhile, a spokesperson for OpenSea didn’t immediately reply to requests for remarks. In line with a February report, NFT marketplaces could ultimately be required to adjust to KYC and different anti-money-laundering obligations.