The US Treasury Department has assessed the risk of non-fungible tokens (NFTs) being used for illicit financing, and has found that they lack proper roadblocks to prevent illicit applications.
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In a report published Wednesday, the Treasury Department concluded that NFTs "are highly susceptible to use in fraud and scams," and that inadequate cybersecurity and protections on NFT platforms make it easy for cybercriminals to steal the once-popular digital assets . Horse, hit stable door.
In addition to not being used as a vehicle for fraud and scams such as carpet pulling (when an NFT project suddenly ends and the fraudster disappears with invested funds), chargeback fraud and market manipulation, the Treasury Department said NFTs have often been observed being used by cybercriminals to launder money.
Money laundering, it said, is facilitated by the fact that many NFT platforms lack any kind of customer identification requirements, making it easy for the platforms to be used for illicit transactions.
