Treasury Weighs In on NFTs and Art Crime

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Treasury Warns of Money Laundering
The U.S. Treasury acknowledged NFT-based art today, focusing on money laundering and possible regulation of the sector.

The Department of the Treasury published a press release and report on illicit finance in high-value art markets, in which it took particular note of the emerging NFT sector and its capacity for money laundering.

The Treasury specifically warned that NFTs can be used in self-laundering, a practice in which users spend funds on an NFT that they already own in order to create obfuscated transaction trails on the blockchain.

This sort of money laundering was one explanation offered when a CryptoPunk NFT was sold for more than $500 million in October 2021.

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