A new U.S. Treasury report gives a warning about non-fungible tokens’ (NFTs) possible involvement with illicit financial activities.
The Treasury report, titled “Study of the Facilitation of Money Laundering and Terror Finance Through the Trade in Works of Art,” mentions that “the emerging online art market may present new risks,” which federal authorities said could depend on the “structure and incentives of certain activity in this sector of the market.” The U.S. Treasury gave the purchase of NFT as an example and “digital units on an underlying blockchain that can represent ownership of a digital work of art.”
NFTs may be vulnerable and used for crimes within the global art scene trading; these include money laundering and “self-laundering,” where criminals purchase an NFT with illicit funds and transact with themselves to create records of sales on the blockchain. The Treasury report mentioned that NFT platforms including Dapper Labs, Open Sea, and SuperRare could be considered virtual asset service providers (VASP) if used for payment or investment purposes.
Some NFT platforms may qualify as virtual asset service providers (VASPs) depending on the characteristics of the NFTs that they offer. In addition, platforms or persons doing business transferring virtual assets during the buying or selling of NFTs may have U.S. Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) obligations under the Financial Crimes enforcement Network (FinCEN) rules for money service businesses if they are doing business in the United States.
In other news, Jordan and Myanmar have joined the growing list of countries looking into a state-backed digital currency.
The Central Bank of Jordan is exploring the feasibility of a digital dinar. Governor Adel Al Sharkas said that the government might legalize digital currency trading if proper regulations and guidelines are set. Meanwhile, Myanmar plans to create its own CBDC to lift the economy although Major General Zaw Min Tun, the deputy information minister, said they have yet to decide whether to do it with local companies or by the government alone.
In Europe, the United Kingdom is still exploring whether to issue a CBDC. However, the Bank of England is not keen on launching a consumer-facing digital wallet that will carry the so-called digital pound in the near future. According to Katie Fortune, CBDC unit senior manager to the bank, it’s highly unlikely for the BoE to push for this.
In China, the mobile wallet for its digital yuan went live on app stores in January, while El Salvador is encouraging its citizens to use the state-backed wallet Chivo.
In BSV news enterprise blockchain services provider TAAL Distributed Information Technologies Inc. (CSE:TAAL | FWB:9SQ1 | OTC: TAALF) has made history Monday.
The company mined the biggest Bitcoin block in history—Block number 725,551—at 3.87GB. It had over 188 thousand transactions and collected close to 10 BSV in transaction fees.
This week, Bitcoin Association for BSV also announced that it had become a member of the Swiss-Polish Blockchain Association. The move supports its growing mandate in Central Europe in building awareness of the BSV blockchain in both Switzerland and Poland, particularly for enterprises and governments.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
And check out the latest episode of CoinGeek Backstage with author and economist Eswar Prasad, who talks about how Bitcoin democratizes finance. Watch the full interview with Nidhi Arora on the CoinGeek YouTube channel.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.