The Royal United Services Institute Explores NFT-Related Risks

The Royal United Services institute explores all of the risks related to NFTs but especially all issues that come from money laundering and whether NFTs are become their new frontier so let’s find out today in our altcoin latest news.

The Royal United Services Institute is exploring whether NFTs are going to be the entry door for money laundering as they published a report assessing the money laundering risks in the NFT market and questioned whether the digital art craze became a new problem that can lead to money laundering:

“To start with, NFTs are most often purchased with cryptocurrencies on online marketplaces. Cryptocurrencies are routinely exploited for malicious means, such as obfuscating the source of criminal proceeds and, despite transactions being traceable, more sophisticated criminal actors use a variety of techniques to disrupt investigations by law enforcement.”

RUSI also noted that NFTs can be exploited by money launderers in a similar way to the art market in the traditional sense as the report added:

“Criminal actors can hack into user accounts on NFT marketplaces and transfer NFTs to their own actions. After transferring the NFTs, the hacker can quickly sell the stolen token(s) and attempt to launder the proceeds.
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RUSI claims the digital aspect of the tokens crate room for more risks like hiding information within the tokens which can be about software vulnerabilities. NFTs could then be used as a transfer mechanism to share information between criminals. The report suggested that the regulatory framework applied to crypto at the point of exchange “can be applied” to the online auction houses for NFTs:

“A baseline needs to be set for companies that want to focus on the NFT Industry. A system of ‘know your customer’ (KYC) policies and ongoing monitoring, similar to those used in the traditional art market and in compliant cryptocurrency exchanges, needs to be implemented.”

The British Think Tank suggests creating a registry of stolen NFTs that can mimic the Art Loss Register in the traditional art world. RUSI is not the only British organization that is aware of money laundering risks that are related to these types of assets. Earlier this year, a London Metropolitan Police’s Arts and Antiques Unit spokesperson said that they are aware of the risks and that blockchain technology allows for beneficial owners to conceal their identity.