NFTs and Its Associated Vices
We have brought you this news through Tycoon Insight. So How Much Does It Cost to Create an NFT? Could it be because credible folks across the globe have predicted that NFTs will become the future of artworks? Is it the next “gold mine?”
As a result, maybe the next Vincent Van Gogh would be a computer programmer? That is left for nature to decide all these assumptions. To begin with, we must establish a basic understanding of what non-fungible tokens are before we dive deep into their usage for unlawful activities.
The term is confusing to several folks out there. So we’ll dissect it for you by uncovering NFTs and how it has become a new frontier for money laundering in this post. This article is not meant to criticize NFTs but to enlighten you on what they are. What opportunities they afford, and to discourage the use NFTs for money laundering.
What Are NFTs?
An NFT, otherwise known as non-fungible tokens, are unique digital collectibles or assets created and traded on the Blockchain. They have been in existence since 2012, although it was in the elementary stage of development at that time. It can also be called a legally owned digital property. And because the different use cases that NFTs possess could mean other things to different people. In general, an NFT is a unique digital property used to represent an asset. Which can be in the form of digital artwork, a piece of music, or an item in a computer game with some verifiable proof of authenticity.
Many people see these digital art pieces as a profitable and viable asset common among the younger population. These NFTs can be held by their owners, traded, or sold for Cryptocurrency or real-world fiat currency. For instance, the NFT representations of Edward Snowden and Jack Dorsey were sold for over $5.4 million and $2.9 million, respectively. Which is a testament to the lucrative nature of these artworks. Despite this, some detractors see these non-fungible tokens as a mere short-term novelty. Indeed, time will tell if these NFTs are sustainable or just a fad. Do you interested in this kind of ICO scam alerts news? Stay with Tycoon Insights to the end of this article to see how people Use NFTs for Money Laundering?
Why the Popularity?
To answer why NFTs are so popular, we must agree that anything can go viral on social media. Which is the same for these Blockchain products. However, one of the significant reasons NFTs are so popular is because it gives the artists and content creators the ease of displaying their work beyond their geographical locations. Hence, anyone from any country can purchase digital assets or non-fungible tokens without difficulties as long as such an individual is a little bit tech-savvy.
Furthermore, anyone on the Blockchain can determine the originality of the assets, thus preventing counterfeiting. That way, consumers are sure they are buying genuine products. And the creators also have complete control over how they want to monetize their artworks.
Notable NFTs Artists
There are hundreds to thousands of artists/groups that create or interact with NFTs across the world, but there are a few artists worthy of mention, such as:
- Mike Winkelmann – popularly known as “Beeple,” whose digital artwork includes everything from whimsical giant flies swirling around a combatant Mike Pence, and he sold over a mind-boggling $69 million of digital arts at one time.
- Greg Solano and Wylie Aronow – Although they are popularly known with their pseudonyms, these two men are the great people of the well-liked “Bored Apes Yacht Club (BAYC).” The Bored Apes NFTs are a collection of unique series of 10,000 digital images of apathetic apes minted on the Ethereum Blockchain in April 2021. It is widely claimed that they are currently the most expensive NFTs globally (collectively), having generated more than $780m worth of trading volume so far. The lowest price for one of these Bored Apes is currently over $280,000, which is a massive price increase, considering its worth in April 2021 (i.e., $300.)
- Notable celebrities such as Snoop Dogg and Paris Hilton are holders of these NFTs.
- LarvaLabs – creative duos Matt and John are the NFT artists behind Lavalabs. They have made over $550 million in lifetime sales, including the popular NFT project, “Cryptopunks.”
- Gary Vaynerchuk – founder of VaynerX and an angel investor in emerging tech who is widely known as “Garyvee,” has taken NFTs to uncharted territories and has earned his place as an NFT artist.
- Others are Mad Dog Jones, Pak, Justin Blau, e.t.c. They have also excelled in their NFT businesses.
Do artists Use NFTs for Money Laundering?
These criteria were used for the selection: they are artists or groups of people with a unique art niche, are active with a sizable social media following, have products listed on popular NFT platforms, possess a consistent release schedule for their NFTs, and have made significant sales. The list is inexhaustible.
What is Money Laundering?
According to the Oxford dictionary, money laundering is “the concealment of the origins of illegally obtained money, typically through transfers involving foreign banks or legitimate businesses.” The above definition depicts that the money laundering practice has existed for a long time, before the advent of Blockchain technology, which could give some credibility to proponents’ views that Blockchain technology can even reduce money laundering against the existing system. On the other hand, governments of different countries see the Blockchain as a threat to traditional finance. They believe criminals worldwide use NFTs for money laundering through the Blockchain.
Relationship between NFTs and Cryptocurrency
Despite the thousands of NFTs in existence, the primary way to purchase them is first by buying coins like Ethereum, BNB, Solana, etc. But, of course, one can also acquire Crypto with credit cards or cash, as the case may be, and then use it to purchase NFTs. But, in the end, buyers of NFTs must use Cryptocurrency.
The majority of the NFT traders are Crypto investors, so requiring Cryptocurrency to purchase their NFT is a smart move for those investors, as it increases demand, value, and widespread adoption. It is important to note that Tycoon had once created an NFT challenge sometime in June 2021. Participants competed against themselves on Twitter and rewarded the best NFT artist with over 2000 TYC (i.e., Tycoon token) coupled with the opportunity to work with Tycoon’s Marketing Team for one week. It is healthy to promote NFTs, increasing adoption and encouraging legitimate users. We also have an upcoming plan for the Tycoon NFT Collection later in the year. Visit Tycoon Insight to learn more about various information about Blockchain, Cryptocurrency, and NFTs.
Use NFTs for Money Laundering: Appeals and Risks
Why does it matter? Creating, storing, trading, or interacting with NFTs has value, rewards, or benefits for creators and buyers. NFTs afford creators the ease of doing their business without the need for a physical gallery. What about the customers? They can also own a discrete, genuine digital asset.
These NFTs are the digital representations or replacements for physical artworks or collector’s items. Instead of owning an oil painting that is destructible, the buyer gets a unique digital version that is immutable. However, some would argue that digital assets like NFTs are more beneficial to the creators/artists in terms of monetary value.
On the other hand, regardless of NFTs and Blockchain technology’s advantages, they are also not without drawbacks or flaws. There are no perfect systems, not even the existing traditional systems that we currently have in place, so criminal elements worldwide are always looking for subtle ways to outsmart the system or governments, as the case may be. The Blockchain, NFTs, etc., technology is no different.
Blockchain and legal issues
Furthermore, hosts of legal loose ends within the Blockchain casts non-fungible tokens and Cryptocurrencies in an uncertain light due to their complexity while tracing transactions. As a result, NFTs and Cryptocurrencies have shown themselves prone to fraud and misuse. In the past, without a doubt. Terrorists and bad actors have used Cryptocurrencies and NFTs to launder money across several jurisdictions to commit their evil plans. Regarding Cryptocurrencies and how they use NFTs for money laundering, these unscrupulous elements usually obfuscate the source of criminal proceeds. Moreover, despite the transactions being traceable, more and more sophisticated bad actors use diverse techniques to obstruct investigations by law enforcement agencies.
Cybersecurity issues such as phishing schemes, virus attacks, identity frauds, and forgeries have now become significant threats and issues of concern for many individuals, companies, and governments. There have been many security breaches in the past decades and this Blockchain era. As a result, it can drain digital wallets and online accounts, where their financial details or assets are kept in the twinkling of an eye. Apart from use NFTs for money laundering, it is also a vital instrument for tax evasion in many countries.
Nowadays, because of the centralized nature of the Blockchain, it is more difficult to track or pin down these frauds. Isn’t this funny? Amusingly, one of the appeals of NFTs is that they are designed to make it easy to track ownership details and transactions on a digital ledger called Blockchain. Compliance professionals and government institutions are now pressured to understand how this technology functions and combat how they use NFTs for money laundering. It is a matter of global security.
Tackling How They Use NFTs for Money Laundering
In recent times. Compliance professionals are becoming increasingly aware of the anonymity that NFTs enjoy due to their use of the Blockchain. And how it has fostered an environment ripe for money laundering.
To mention a few, recently. An NFT platform “Hitpiece” that advertises itself as a marketplace for collection of non-fungible tokens of users’ favorite songs was just accused with strings of an allegation of stealing the Artists’ music by listing their music without prior authorization. In addition, they charged them for listing unofficial NFTs based on the intellectual property of top brands such as Disney. Leading to several court cases for copyright infringements and piracy.
NFT art money laundering and anti-fraud measures are slowly taking shape within the Crypto industry. And more participants have shown interest. They offer helping hands by cooperating with government entities and financial crime investigators.
To tackle these concerns The United States government recently passed several anti-money laundering provisions in the omnibus National Defense Authorization Act (NDAA). Which took effect in January 2021. Given the issues, we’ve been talking about. Do you still think people Use NFTs for Money Laundering?
The NDAA includes reforms and updates to several anti-money laundering laws. Including the Bank Secrecy Act (BSA). The Anti-Money Laundering Act (AMLA). And the newly enacted Corporate Transparency Act (CTA)
Anyone who intends to use the internet must learn and practice basic cybersecurity principles to prevent being hacked or scammed by these evil perpetrators.
Join Tycoon as the best Social Crypto Trading Platform
At Tycoon, security is our top priority, and this is non-negotiable. We are confident that our platform is secure. It has been subjected to different tests, and we have no security issues to date. In addition, we have also intentionally allowed your assets to be in your custody or control.
We are fully ready to work with government agencies to identify and fish out bad actors for the safety of everyone. Because of this, we have made KYC mandatory for all users on the Tycoon Platform, which will further prevent criminals from using our trading platform for money laundering. Tycoon.io is secure, and it remains the best social Crypto trading platform with all its unique features.
Conclusion about “use NFTs for money laundering”
Today, you have learned about non-fungible tokens, their merits, and demerits. And how to tackle the way people use NFTs for money laundering. To conclude, national or global security is everyone’s business. We must all strive to protect ourselves first from becoming victims while helping others, and these conditions by all mean are possible. I am confident that this will not be the last time you’ll hear about NFTs on Tycoon Insight.
Stay tuned, and please watch this space as we bring the most recent Blockchain News across your way. Finally, don’t forget to visit Tycoon.io if you are interested in automated, seamless trading. It doesn’t matter what stage you are in your trading journey. So take a look, sign up, and get started today!