The market for non-fungible tokens (NFTs) exploded last year.
In 2021, at least $ 44.2 billion worth of cryptocurrencies were sent to two Ethereum smart contracts “associated with NFT marketplaces and collections,” data from blockchain analytics firm Chain Analysis show. increase. Smart contracts are a collection of code that enhances decentralized applications and NFTs.
But with the hype, the scammers saw the opportunity.
According to a new report, Chainalysis discovered “small but visible” money laundering activities at NFTs. In the third quarter of 2021, funds sent to the NFT marketplace by illegal addresses “jumped significantly” and exceeded $ 1 million worth of cryptocurrencies, Chainalysis wrote. In the fourth quarter, that amount was just below $ 1.4 million.
To calculate the findings, Chainalysis tracks illegal addresses, or addresses related to criminals such as fraudsters, and whether cybercriminals are using illegal funds to purchase NFTs. I confirmed.
Chain analysis refused to disclose the particular NFT platform it analyzed, but stated that its findings included only NFTs purchased from Ethereum (ETH) and Wrap Ethereum (WETH) and were not flat. rice field.
According to chain analysis, the amount of potential NFT-based money laundering in 2021 is a “bucket drop” compared to overall cryptocurrency-based money laundering, but it is worth pointing out.
“Money laundering, especially remittances from licensed cryptocurrency businesses, represents a significant risk in building trust in NFTs and should be closely monitored by markets, regulators and law enforcement agencies.” The company is writing.
Investors should consider choosing an NFT marketplace that is well protected against money laundering and other fraud, says Kim Grauer, Research Director at Chainalysis. Choosing a reputable market can help strengthen the entire NFT market.
“Our report shows that thanks to the inherent transparency of blockchain, NFT platforms with the right data and tools can effectively monitor the platform and prevent and prevent misuse such as money laundering. It shows, “Grauer tells CNBC Make It.
“The NFT platform needs to consider the rules for clothes trading on the platform in order to increase confidence in this asset class,” she adds.
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