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

The US Treasury has launched its first NFT risk assessment, a major bold step. This detail report uncovers the hidden risks and security threats in the volatile and hellish NFT industry.

Interestingly, Treasury has found that digital art fraud often reflects age-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 rapid intervention and stricter oversight in the chaotic NFT space.

He spots several red flagssome of them based solely on guesswork:

• Financing of terrorism: NFTs could finance terrorism.
• Nuclear proliferation: State actors could channel NFT profits to finance nuclear weapons.
• Money laundering: A brilliant new tool for washing dirty silver.
• Investor fraud: The usual suspects: scams, thefts and rug pulling

The report highlights that these risks are not unique to digital assets.

“This risk assessment recognizes that most money laundering, terrorist financing and proliferation financing, in terms of volume and value of transactions, occurs in fiat currency or otherwise outside the ecosystem of digital assets via more traditional methods,” the report highlights.

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

Recommendations for regulating digital art

Despite fears, Treasury admits real cases of NFT finance terrorismallowing the trade in nuclear weapons, or drug networks are rare.

North Korean hackers are stealing digital assets to circumvent US sanctions against their military, with NFTs making up a small portion of the loot.

That said, they concluded the report with key regulatory recommendations:

• Regulation: Develop specific NFT rules to reduce risks.
• Collaboration with industry: Team up with insiders to fight fraud.
• Consumer education: Inform the public about the risks of NFT

The Bottom Line: A Call to Action on Digital Asset Regulation

Regulators, industry players and users are about to find themselves in a collision course as the digital art scene evolves.

The Treasury report may flirt with extravagance, but it makes one thing clear: broad regulation is coming.

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

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

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