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United States Department of The Treasury warns against NFTs, digital art market risks

WASHINGTON D.C.

The US Treasury Department warned Friday against risks around the emerging digital art market and the use of non-fungible tokens (NFTs).

The agency said its study examined the facilitation of money laundering, financing of terrorism through trade in high-value digital art and certain participants in those markets.

“Several qualities inherent to high-value art – the way it is bought and sold and certain market participants – may make the high-value art market attractive for money laundering by criminals,” it said in a statement.

“Further, the emerging digital art market, such as the use of non-fungible tokens (NFTs), may present new risks, depending on the structure and market incentives,” it added.

The agency recommended creating and enhancing private sector information-sharing programs to foster transparency among art market participants.

Other recommendations included updating guidance and training for law enforcement, urging authorities to support information collection and applying certain requirements for suspicious activity reporting.

LAST UPDATE: February 12th, 2022 11:42 am

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