NFTs
NFTs Vulnerable to Fraud and Scams, US Treasury Says – Calls for Stricter Regulations
May 30, 2024 2:08 am | 2 minutes reading
The US Treasury Department has sounded an alarm about non-fungible tokens, deeming blockchain-based assets highly susceptible to use in fraud and scams.
What happened: In a new assessment of illicit NFT financial risk report released on Wednesday, Treasury noted that gaps in the asset class could be exploited by bad actors to launder criminal money, thereby hiding illegal origins.
That said, the report found significantly less evidence of NFT misuse for terrorism and proliferation financing.
Treasury has detected several issues with the niche cryptocurrency vertical, such as inadequate cybersecurity protections, challenges related to copyright and trademark protections, and fluctuating prices of NFTs.
Additionally, some NFT platforms were found to lack “appropriate” controls to combat money laundering and terrorist financing.
To address these risks, Treasury has advocated for stricter enforcement of current laws in the sector, implementing additional regulations and increasing the industry’s understanding of the associated dangers.
Why this matters: Without clear laws governing the industry, NFTs remain on the radar of US regulators.
At the beginning of the year, GameStop Corp. close your NFT marketplace citing regulatory uncertainty.
The SEC accused the Los Angeles-based media and entertainment company, Impact Theory, LLC last year, on charges of conducting an unauthorized offering of securities of cryptocurrency assets through NFTs.
Even the football star Cristiano Ronaldo was hit with a $1 billion class action lawsuit for investments promoted in your NFTs in Binance (CRIT: BNB)
In the last 24 hours, NFTs recorded a sales volume of almost $17 million in more than 240,000 transactions, according to for CryptoSlam. Bitcoin (CRYPTO: Bitcoin) was the largest NFT network, with over $5 million in volume, followed by Ethereum (CRYPTO: ETH) It is Solana (CRYPTO: SUN)
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