The release of a “study on illicit finance in the high-value art market” by the United States Department of the Treasury was announced on Friday. The Anti-Money Laundering Act of 2020, which mandated the study, was passed by Congress.
Specifically, the Treasury Department wrote that “this study examined art market participants and sectors of the high-value art market that may present money laundering and terrorist financing risks to the United States financial system.” It went on to say that
The emergence of a new digital art market, such as the use of non-fungible tokens (NFTs), may introduce new risks, depending on the market’s structure and incentive structure.
A number of recommendations are made in order to mitigate the risks, including updating training for law enforcement and customs officials, increasing private sector information sharing, and imposing anti-money laundering and counter-terrorist financing requirements on specific participants in the art market.
According to the company, according to Dappradar, the total volume of NFT sales in 2021 will reach $24.9 billion, up from $94.9 million the previous year. In a recent report, Jefferies analysts predicted that the market for nonferrous metals could reach $35 billion in 2022 and more than $80 billion by 2025.
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Scammers have taken advantage of the growing popularity of NFTs, which has raised concerns among regulators.
Earlier this year, T. K. Keen, administrator of the Division of Financial Regulation in the U.S. state of Oregon, issued a warning: “Scams promising large returns on cryptocurrencies and non-financial tokens (NFTs) are flooding the Internet.”
“Investors interested in purchasing cryptocurrencies and non-financial tokens should do their research to ensure that they fully understand these investments and the risks associated with them before getting involved.”