NFTs Enable Terrorism and Illicit Trade in Nuclear Weapons, According to US Treasury –

The US Treasury has released its first NFT risk assessment, an important and bold step. This detailed report reveals the security risks and threats hidden in the volatile NFT sector.

Interestingly, the Treasury found that fraud in the digital art space often reflects old financial schemes such as Ponzi schemes and insider trading.

However, there are also unique threats such as smart contract manipulation. Here’s what else they found in this new report:

US Treasury Highlights Potential Risks of NFTs

The report calls for swift intervention and stricter oversight in the chaotic NFT space.

It stains multiple red flagssome of them based only on conjecture:

• Terrorist Financing: NFTs can finance terrorism.
• Nuclear proliferation: State actors can channel NFT profits to finance nuclear weapons.
• Money laundry: A brand new tool for laundering dirty money.
• Investor Fraud: The usual suspects – fraud, theft and rug pulling

The report emphasizes that these risks are not exclusive to digital assets.

“This risk assessment recognizes that the majority of money laundering, terrorist financing and proliferation financing in terms of volume and value of transactions occurs in fiat currency or otherwise outside the digital asset ecosystem through more traditional”, highlighted the report.

This comes at a time when Solana meme coins have completely dethroned digital art.

Recommendations for regulating digital art

Despite fears, the Treasury admits that real cases of NFTs terrorist financingallowing trade in nuclear weapons, or drug networks are rare.

One highlight is North Korean hackers stealing digital assets to circumvent US sanctions on their military, with NFTs being a small part of the loot.

That said, they concluded the report with important recommendations for regulation:

• Regulation: Drafting specific NFT rules to reduce risks.
• Industry Collaboration: Teaming up with insiders to fight fraud.
• Consumer Education: Informing the Public About NFT Risks

Conclusion: A Call to Action on Digital Asset Regulation

Regulators, industry participants and users are on a collision course as the digital art landscape evolves.

The Treasury report may flirt with the strange, but it makes one thing clear: general regulation is coming.

“The assessment concludes that NFTs are highly susceptible to use in fraud and scams and are subject to theft,” concludes the Treasury.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You can lose all your capital

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