NFT and money laundering: an emerging use?
Using physical art pieces to discreetly channel illicit capital is an activity that has been around for centuries. It is therefore logical that the trend is digitized, at the same time as the art sector. In any case, this is the hypothesis that more and more players in the crypto-community are making, including the renowned investor Mr Whale.
In an analysis published a few days ago, he explains that art being subjective, it is particularly suitable for passing large sums of money without knowing whether the purchase is legitimate or not. After all, if buyers choose to shell out $ 17 million for 9 images of Cryptopunks stored on the blockchain, they can be quite sincere in their admiration of these pixel clusters. By nature, a person’s interest in a piece of art is therefore not quantifiable.
This is why the large sums conveyed by the NFT sector are widely interpreted as a buying fever on the part of collectors, and as proof that as long as a piece is rare, it can increase in value. But are some uses less innocent than that?
👉 To go further – How can blockchain revolutionize the art market?
Laundering money through NFTs
According to Mr Whale’s analysis, laundering money using an NFT is very simple. For the holder of illicitly obtained funds, it suffices to make a first purchase of a non-fungible token, with “clean” money. Then to buy back this same NFT with the illicit cryptocurrencies, in order to launder them.
The maneuver is facilitated by two things: the status of cryptocurrencies, which are not subject to the same rigor as transfers of fiat currencies. On the other hand, the relative anonymity of buyers: among the biggest sales of NFT of all time, some were made by people whose pseudonym is only known.
👉 More info on non-fungible tokens (NFT)
A trend that will attract the attention of regulators
Already, some sales are raising a few eyebrows among members of the crypto-community. This week, we learned that an image of a pebble had been exchanged for 135,240 dollars. This had raised questions about the buyer’s motivations, although it is of course difficult to determine his real intention.
In any case, it is a safe bet that if this possible trend towards money laundering continues, we will see regulators monitoring the NFT sector more insistently. We also note that if this use is proven, it shows one thing: digital art has reached a status similar to physical art, since it generates the same mechanisms – illegal or not …
👉 On the same subject – According to Damien Hirst, NFTs could replace art galleries
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About the author: Marine Debelloir
Deputy Editor-in-Chief on Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that arise from the blockchain and I like to find the most delicious information to share with you.
All articles by Marine Debelloir.