By Alicia Maher
The US Treasury Department recently produced a report on the high-end art marketplace, emphasizing the possibility for illicit financial fraud and terror funding in the NFT arena. Doing more business with art could make it easier for people to hide their cash, the Department of the Treasury said.
US Treasury Suspects NFTs of High-end Art Money Laundering
To counteract financial fraud and terror financing, a study conducted by the Treasury Department found that trading in high-priced artwork may make it easier for criminals to launder cash.
Some people who buy NFTs, digital parts on a blockchain that could be used to possess digital art, may face possible threats in the rise of the novel online art market because of how this operation is organized and what people are incentivized to do.
The paper emphasizes the significance of NFTs in reflecting possession of virtual and actual property governed and regulated through smart contracts and digital wallets. The Treasury also emphasizes that the contracting parties, not the economy, dictate the value of NFTs: There was a 2,627% growth rate above the past quarter, as per the United States officials, for NFTs during the initial 3-months of last year.
Nevertheless, the NFT industry alone was estimated to be worth over $20B in 2020. The US Treasury recommended that criminals buy NFTs with illegal funds and resell them to an unwitting collector who’d remunerate the culprit with smooth funds unrelated to a previous crime.
It is also possible to sell NFTs directly via P2P transactions, avoiding the requirement for a middleman or a public ledger entry. The Treasury deduced while highlighting the multiple money laundering risks made feasible by the NFT environment: Additionally, typical sector participants, like art auctions houses or galleries, might lack the technical expertise necessary to conduct successful client recognition and authentication in this arena.
Brenda Gentry and Cryptocurrency
Cryptocurrency has given Brenda Gentry, a former USAA mortgage underwriter transformed cryptocurrency business owner, an opportunity to break the ancestral plagues of hardship. Gentry, better known by her online name as MsCryptoMom, quit her position as a banker to devote herself full-time to the cryptocurrency industry after her initial 2020 investments proved the extraordinary prospects of cryptocurrency.
Gentry knows that cryptography is a lot to learn, so she makes educational materials for her online platform: Aside from that, I’m holding seminars to teach the wider populace how to navigate the NFT and Decentralized Finance token markets and how to spot fraudulent schemes and rug pulls.