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US Treasury issue statement on NFTs and art crimes

Although Wikipedia does not regard NFTs as art, the US Treasury does, and it has recognised their role in art-related crimes.

On February 5, the US Treasury Department issued a news release and a study on illegal finance in high-value art markets. The study highlights the expanding NFT industry and its ability to money laundering. The Treasury stated that NFTs used for payments and investments might be classified as virtual assets. As a result, organisations that develop or trade NFTs may be classified as Virtual Asset Service Providers (VASPs) and subject to Financial Action Task Force (FATF) regulations.

The Treasury also warned that the NFT sector presently lacks standards and due diligence, as well as a centralised organisation. It stated that this may “create perverse incentives,” because automated and quick NFT sales could boost money laundering. It was pointed out that professionals in the conventional art and auction businesses, on the other hand, tend to conduct their business far more cautiously, with various institutional protections in place.

The Treasury also expressed worry that “the incentive to transact may be greater than the motivation to authenticate the identity of the buyer of the work.”

Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.


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