UK Security Think Tank Report Warns NFTs Could Boost Money Laundering Programs – Bitcoin News

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The Royal United Services Institute (RUSI), the UK’s defense and security think tank, is questioning whether non-fungible assets (NFTs) can be used for money laundering purposes. The report determines that in order to mitigate the risks of money laundering, a “know your customer” monitoring system “must be implemented”.

RUSI: “NFT technology may sound the alarm bells for money laundering and financial crime”

The Royal United Services Institute for Defense and Security Studies, also known as RUSI, was founded in 1831 and is the oldest defense and security think tank in the world. On December 2, RUSI released a report that covers the topic of non-fungible token (NFT) assets and RUSI researchers are asking whether or not NFTs can contribute to money laundering schemes.

“This technology can sound the alarm bells from a money laundering and financial crime perspective,” warns RUSI. “For starters, NFTs are most often bought with cryptocurrencies on online marketplaces. Cryptocurrencies are commonly exploited for malicious purposes, such as concealing the source of the proceeds of crime, and although transactions are traceable, more sophisticated criminal actors use various techniques to disrupt law enforcement investigations. .

The RUSI report titled “NFT: A New Frontier for Money Laundering?” Further states:

A system of “know your customer” policies and ongoing monitoring, similar to those used in the traditional art market and in compliant cryptocurrency exchanges, should be implemented.

Money laundering considered common practice in traditional art market – RUSI researchers say ‘art burglary is also possible in the field of NFT’

Money laundering in the traditional arts scene has been an ongoing debate for decades. New York Times investigative reporter Graham Bowley explained on June 19 that American politicians wanted to investigate the secret art market. “Secrecy has long been part of the mystique of the art market, but now lawmakers say they fear it promotes abuse and needs to be addressed,” Bowley wrote.

RUSI researchers point out that criminal actors can also infiltrate NFT markets and take advantage of “new risks”. “Art theft is also possible in the NFT area,” adds the RUSI report. “Criminal actors can hack user accounts in NFT marketplaces and transfer NFTs to their own accounts. After transferring the NFTs, the hacker can quickly sell the stolen token (s) and attempt to launder the proceeds.

While RUSI researchers believe that money laundering in the world of NFT art and collectibles can be deterred, the report also points out that “NFT counterfeiting and theft can also be mitigated.” RUSI suggests that NFT markets use two-factor authentication (2FA) solutions and maintain “good cybersecurity”. Additionally, RUSI suggests developing a stolen NFT registry that “mimics the art loss registry”.

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What do you think of the RUSI report on NFTs and the risks of money laundering? Let us know what you think of this topic in the comments section below.

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