According to the Department of Treasury, the growing use of art as an investment or financial instrument could make high-value art markets vulnerable to money laundering.
The US Treasury Department recently released a report on the high-value art market, underlining the possibility for illicit money laundering and terror funding in the non-fungible tokens (NFT) arena.
According to the Treasury Department's "Study on the Facilitation of Money Laundering and Terrorist Financing via the Trade in Works of Art," the growing usage of art as an investment or financial instrument could render high-value art trades vulnerable to money laundering:
“The emerging online art market may present new risks, depending on the structure and incentives of certain activity in this sector of the market (i.e., the purchase of NFTs, digital units on an underlying blockchain that can represent ownership of a digital work of art).”
The treasury also points out that the price of NFTs is determined by the buyer and seller and not the market
Moreover, the treasury suggested a possibility where criminals can purchase NFTs with illicit funds and resold to an unwary collector "who would compensate the criminal with clean funds not tied to a prior crime".
Brenda Gentry, a USAA mortgage underwriter turned crypto entrepreneur, recently shared how the cryptocurrency ecosystem offered her a fighting chance to overcome the generational curses of poverty.
Gentry, known as MsCryptoMom, left her decade-long job as a banker to pursue a full-time crypto career as her initial investments from early 2020 confirmed the "unprecedented opportunities offered by crypto".