NFT can be used for money laundering and financial crime purposes, RUSI (Royal United Services Institute) warns about it. The report from RUSI suggests implementing the ‘Know your customer’ rule to mitigate this threat.
Non-Fungible Token (NFTs) popularity is increasing with each passing day. You can guess the increasing popularity of the NFTs by looking at the data, which shows that the NFT universe had a market cap of $400 million at the start of the year. Now the market cap of the NFT universe has crossed the mark of $7 billion. This sudden increase in the market cap of the NFT universe has rung bells for many institutions.
NFT can be used for money laundering purposes:
The oldest defense and security think tank worldwide, RUSI, has published a report. This report questions whether NFT can be used for money laundering schemes or not. The report stated that this technology can raise alarm bells from a money laundering and financial crime perspective. Crypto coins are routinely exploited for malicious means and sophisticated criminals use a variety of techniques to disrupt investigation by law enforcement.
RUSI has also suggested a technique to control this rising threat. They further said:
A system of ‘know your customer policies and ongoing monitoring, similar to those used in the traditional art market and in compliant cryptocurrency exchanges, needs to be implemented.
While RUSI researchers believe that money laundering in the NFT art and collectibles world can be deterred, the report also highlights that “NFT forgery and theft can also be mitigated.” RUSI suggests that NFT marketplaces use two-factor authentication (2FA) solutions and maintain “good cyber security.
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