There are often dark clouds in a silver lining. As the new trend in crypto continues to rise, different skills, investments, and earnings have emerged. Despite this, experts predict unpleasant and unforeseen circumstances can befall the trend of non-fungible tokens in the space.
In a recent study, the United States Treasury Department warned investors about the trend, saying that NFTs can be used for illicit exploitations. The marketplaces for art and digital assets may pose different risks depending on the incentive and structure that the market form will take.
The study also revealed that since the transactions in the NFT market doesn’t consider geographical location, undergo checks across borders, takes a shorter duration to complete operations, criminal and fraudulent activities by those seeking means to launder money through claims on digital assets can easily be carried out without being investigated or suspected.
The department’s study also spotted instances of one using illicit funds to purchase and perform transactions to another wallet in their custody, thereby laying claims to clean funds as the seller since the transactions may or may not be vividly recorded on a public ledger if the need for further investigation arises.
While it is still very convenient to transfer, create, own and collect digital assets between parties eliminating the traditional method of insuring, transporting, undergoing custom duties, checkpoints, risk of damage before, during, and after the exhibition, or even theft or piracy of designs, there are still so many NFT trends that will fizzle. Though NFTs give their collectors a degree of authentication, the anonymity and decentralized nature of this exchange can bring future threats to investors and collectors of art.
Written By:
Otumawen Precious
