The Royal United Services Institute (RUSI), a British defense and security think tank, questioned whether non-fungible token (NFT) assets can be used for money laundering purposes. The report determined that in order to reduce the risk of money laundering, “know your customer” monitoring system needs to be implemented.

RUSI: “From the perspective of money laundering and financial crimes, NFT technology can sound the alarm”

Royal United Services Institute for Defense and Security, also known as RussiaFounded in 1831, it is the world’s oldest national defense and security think tank. On December 2, RUSI published a report Covering the topic of non-fungible token (NFT) assets, RUSI researchers asked if NFT could contribute to money laundering programs.

RUSI warned: “From the perspective of money laundering and financial crimes, this technology can be a wake-up call.” “First of all, NFTs are most often purchased through cryptocurrencies in online markets. Cryptocurrencies are often used for malicious means, such as obfuscation. Although the source of criminal proceeds is traceable, more sophisticated criminals use various techniques to disrupt law enforcement investigations.”

The RUSI report said “NFT: A new area of ??money laundering?” It further pointed out:

Need to implement a “know your customer” policy and a continuous monitoring system, similar to those used in traditional art markets and compliant cryptocurrency exchanges.

Money laundering is considered commonplace in the traditional art market-RUSI researchers stated that “art robbery may also occur in the NFT field”

Money laundering in the field of traditional art has always been Debate that lasted for decades. New York Times investigative reporter Graham Bowley explain On June 19, American politicians will investigate the secret art market. “Confidentiality has long been a mysterious part of the art market, but now lawmakers say they are worried that this will breed abuse and should be addressed,” Bowley wrote.

RUSI researchers emphasized that criminals can also penetrate the NFT market and take advantage of “new risks.” The RUSI report added: “Art robbery may also occur in the NFT field.” “Criminals can hack into user accounts on the NFT market and transfer the NFT to their own account. After transferring the NFT, hackers can quickly sell the stolen accounts. Tokens and try to launder the proceeds.”

Although RUSI researchers believe that money laundering in the field of NFT art and collectibles can be prevented, the report also emphasizes that “NFT counterfeiting and theft can also be mitigated.” RUSI recommends that the NFT market use two-factor authentication (2FA) solutions and maintain “good network security.”In addition, RUSI proposes to develop a registry of stolen NFTs, “will imitate Art Loss Registry. “

What do you think of RUSI’s report on NFT and money laundering risks? Please tell us your thoughts on this topic in the comments section below.

Image Source: Shutterstock, Pixabay, Wikimedia Commons