The Treasury Department published its first risk assessment on non-fungible tokens.
Background: Non-fungible tokens, or NFTs, are unique digital identifiers that are recorded using distributed ledger technology and may be used to certify authenticity and ownership of an associated right or asset, such as a digital image.
Issues: The assessment found:
NFTs can be stolen and are susceptible to use in fraud and scams.
Criminals use NFTs to launder proceeds from other crimes, often in combination with other techniques or transactions meant to obfuscate the illicit source of funds.
Threat actors such as drug traffickers are increasingly using virtual assets, which could lead to increasing use of NFTs.
Law enforcement has observed that illicit actors often take advantage of the fact that many NFT platforms do not require customer information.
Recommendations: The risk assessment recommends that the federal government raise awareness of the issue, continue to enforce existing laws and regulations related to NFTs, and consider further application of regulations to NFTs.
Background: The Treasury Department last month reiterated its calls for Congress to grant the department additional tools to address illicit actors’ use of cryptocurrencies to facilitate crime.
ICBA View: ICBA supports global efforts to advance international cryptoasset regulation, including the Financial Stability Board’s framework to support consistent regulatory standards and the International Organization of Securities Commissions’ baseline policy recommendations.
