Digital Laundry: How NFTs Deepen the Money Laundering Issue
In 2021, NFTs became one of the hottest topics in crypto. Global publications devote front pages to NFT assets, sports stars invest in them, and even schoolkids make a fortune. However, this bright and rewarding side is easily countered by money laundering and harsh regulatory policies. Let’s boil down these cutting-edge laundering technologies.
NFT Backstory
In March, Mike Winkelman’s, aka Beeple, NFT was auctioned off at Christie’s for $69.3 million. Overnight he joined the cohort of the highest-paid artists alive. Nowadays, Banksy, Pablo Picasso, and Andy Warhol paintings are being turned into NFT, and traditional artists are divided into two camps: some, like Damien Hirst, see a new promising direction, while others, like David Hockney, call the NFT segment “the abode of crooks and swindlers.”
Hockney’s supporters believe, not unreasonably, that the NFT technology can exacerbate the existing problems of the art industry, which has long been called an ideal platform for money laundering. The art trade industry’s enormous turnover and traditional ways make it attractive to criminals who want to legalize untaxed income.
Regulation in this area is getting tougher, so launderers are looking for new tools to implement their schemes. NFTs can be one of those tools. The segment of NFTs remains the Wild West — a transit area doomed to be regulated.
