United States Department of Treasury Sets Eyes on NFTs as Conduit for High-Value Art Money Laundering

The United States Department of Treasure recently researched the high-value art market, in particular, zeroing in on the potential for non-fungible tokens (NFT) to be conduits for money laundering or terrorist financing operations.

Dubbed “Study of the Facilitation of Money Laundering and Terror Finance through the Trade in Works of Art,” the treasury’s study implied that the rising use of various artworks as investments or financial assets exposes the high-value art trades to the risk of money laundering. According to the study:

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 study underscores the significance of NFTs in representing proprietorship of digital and physical properties managed and controlled through digital wallets and smart contracts. The U.S. Treasury likewise notes that it is the buyers and sellers who determine the prices of NFTs and not the market:

According to U.S. authorities, in the first three months of 2021, the market for NFTs generated a record $1.5 billion in trading and grew 2,627 percent over the previous quarter.

Nevertheless, in 2020, the NFT market’s value was estimated at more than $20 billion. It has prompted the U.S. treasury to suggest the possibility of criminals purchasing NFTs with illegal funds and reselling these to an unsuspecting collector “who would compensate the criminal with clean funds not tied to a prior crime.”

One can also sell NFTs through peer-to-peer (P2P) sales, which circumvents the need for an arbitrator or documenting the transaction on the public ledger. Even though they emphasized the different money laundering susceptibilities laid bare by the NFT ecosystem, the U.S. treasury concluded:

Moreover, traditional industry participants, such as art auction houses or galleries, may not have the technical understanding of distributed ledger technology required to practice effective customer identification and verification in this space.

Just recently, Brenda Gentry, a United Services Automobile Association (USAA) mortgage underwriter turned cryptocurrency entrepreneur, shared how the digital asset ecosystem afforded her the prospect of conquering poverty’s generational curses.

To pursue a full-time crypto career, Gentry left a job as a banker, something she has held on to for over ten years. In a tweet, Gentry, who goes by the Twitter handle MsCryptoMom, acknowledged how her initial investments from the early part of 2020 verified the “unprecedented opportunities offered by crypto.”


Gentry has a website where she shares educational content and recognizes the considerable learning curve involved in cryptocurrency.

“I’m also hosting seminars to educate the general public about navigating in this space and things to look out for when searching for good NFT projects or DeFi tokens, and also how to quickly detect scams or rug pulls,” she says on her website.