How exactly can NFTs be used for money laundering?
Ever heard of NFTs being used as a money-laundering tool?
I bet!
NFTs are as interesting a concept as they can get, but there’s a darker side, which actually isn’t far from the truth. There are concerns over money laundering and tax evasion.
But how exactly does this happen?
You’ve heard stories of insanely rich dudes buying digital artwork at outrageous prices.
Here’s one fact - art is subjective in the eye of the beholder; this is why NFTs aren’t scrutinized by regulators. This opens a gateway to NFTs being used as a means for illicit flow of funds.
Bored rich crypto elites can use this medium to make their illegal profits appear legal.
All you simply have to do is buy an NFT from yourself at an outrageous price using dirty money, then claim the funds were used to legitimately purchase art - hence, avoiding taxes. You can resell the stuff and bank the profits.
Most NFT platforms have no KYC/AML regulations, and doing this in decentralized currencies makes it much easier to launder money. There’s a chance this is going to change when regulators come clamping on the NFT industry.