In the current bear market for cryptos, Non-Fungible tokens (NFTs) have emerged as a new way to launder money.
NFTs are digital assets that are unique and, therefore, not interchangeable. They are often used to represent items in video games or other digital worlds and can be bought and sold like any other cryptocurrency.
However, because NFTs are not exchangeable for other assets, they can be used to launder money without converting it back into fiat currency. According to an analysis by StockApps.com, more than $8 million in criminal monies has been laundered through NFT-based platforms since 2017.
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The analysis found that a further $328 million passed through the platforms via the mixers. Mixers allow users to swap cryptos with a certain degree of anonymity. Thus, it may also have included illegal money.
Edith Reads, representing StockApps said, “NFTs are the new way to launder money. The fact that they are not interchangeable makes them perfect for this purpose.
“The problem is that, unlike fiat currency, no central authority regulates NFTs. This means that criminals can easily exploit the system.”
NFTs are likely to thrive
NFTs are likely to continue growing within the crypto space despite hard times. Popular culture throughout the arts, games, sports, and entertainment has embraced NFTs in recent years.
Celebrities’Celebrities’ journey into the murky realm of cryptos, NFTs, appears to increase every few days. It has become a routine, and each rosy proclamation typically comes with the promise of special access to virtual currency.
Celebrity endorsements attract and endear most people to the NFTs. Thus, it guarantees more adoption. The price of NFTs is currently down. However, as the crypto market becomes stable, the NFTs will pick up faster.
Moreover, authorities are exploring the potential threats posed by cryptocurrencies and NFTs. Besides, there are efforts to contemplate how best to control the NFT market.
Threats from sanctioned Organisations
NFT platforms are facing threats of assault from sanctioned firms and state-sponsored organizations. For instance, the North Korean hacking group Lazarus Group executed the March 2018 theft of $540 million from the Ronin Bridge platform of the online game Axie Infinity.
This year, nearly 50.4% of the monies traveling to mixers from sanctioned businesses originated from Hydra. The world’s largest Russian-origin Dark Net marketplace.
The money laundered through Hydra came from various illicit activities. Crypto thefts, ransomware attack profits, and the selling of stolen data are among the sources of capital.