NFTs and Money Laundering

NFTs (non-fungible tokens) were not really popular until some time last year when it kind of took over the digital currency space and help some coins explode in price, NFTs have really helped Artists to tap into their creative side to mint out good collectables, NFTs are not just about Artworks they are digital items that can be bought and sold using this blockchain technology (including a unique piece of arts, digital content, or media).

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Some NFTs became more popular and expensive when popular celebrities started buying and accumulating NFTs, recently the whole Internet exploded when Justin Bieber popular singer bought "Lonely Bored Ape" NFT for $1.29M, that's a huge amount of money but he is not alone in the NFT space we have Steph Curry, Jimmy Fallon, Post Malone, Neymar Jr, Kevin Hart, Paris Hilton, Snoop Dogg e.t.c.

Snoop Dogg to me is one of the smartest celebrities in the NFT business that I have seen, he bought his NFTs at a lower rate as Cozomo de’ Medici and later announced that he is Cozomo de’ Medici, trust that now his NFTs if he wants to sell, will be sold at a much more higher rate because he is a celebrity.

Now the internet space is getting more interesting and a crazy place where anything can happen, My title reads "NFTs and Money Laundering", a thought came into my head a few days about NFTs being used for Money Laundering, cleaning dirty money, and making it legitimate taxable money not that I am advocating for crime, it was just a thought.

For example: let's say If I want to sell drugs to you for $3M, all I will do is to mint three NFTs and list them at $1M each. You as my buyer will buy each at $1M each. Making the money legit and clean, it has automatically become taxable money in advanced countries. It can't ever be traced to drugs

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In recent news report, US Treasury Department report warns NFTs could be used in money laundering, The Treasury writes that while NFTs offer “new opportunities for exploration of creative media” and take up only $1.5 billion of the US’s $20 billion share in the total art market, criminals may use NFTs in financial crime by using funds from illegal activities to make seemingly legitimate digital art purchases.

“The ability to transfer some NFTs via the internet without concern for geographic distance and across borders nearly instantaneously makes digital art susceptible to exploitation by those seeking to launder illicit proceeds of crime, because the movement of value can be accomplished without incurring potential financial, regulatory, or investigative costs of physical shipment,” the Treasury wrote in a 35-page report published Friday.

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