- ChainAlysis analysts have prepared a report on criminal activity in the field of NFT for the past year
- It turned out that the segment has become much more popular among attackers
- Criminals use tokens to launder money, and also pump them up to increase their value
- The damage from their actions is estimated at millions of dollars
According to ChainAlysis, with 2020 to 2021 year, the popularity of tokens has grown significantly. In just one year, sales of these assets grew from 106 million dollars to 44, 2 billion
And there is nothing surprising in the fact that this promising segment is of interest to criminals. Like other digital assets, NFTs are characterized by certain specifics, which makes it possible to use tokens, for example, for money laundering.
Art objects in general are popular from malefactors for “whitening” of incomes. Their cost is mostly subjective, material carriers are easy enough to move, they provide tax benefits, and in some cases are not subject to fees at all.
Q3 2021 2018, the amount of cryptocurrency used to buy NFTs from suspicious, shady or outright illegal addresses exceeded $1 million. In Q4 2021 – $1.4 million.
Criminals use the purchase of NFTs to legalize income from scams, hacker attacks and extortion. At the same time, the lack of regulation and the popularization of DeFi platforms in most cases do not allow tracking the attacker.
Over the past year, scammers laundered $8.6 billion in cryptocurrencies. And even though only a small part falls on the NFT, the overall situation is complicated. Increasing levels of crime in this area are leading to the erosion of trust. But this is not the worst.
The segment of digital assets in general, as well as tokens in particular, remains extremely vulnerable to scam projects and other kinds of fraud. One example of this practice is the “pumping” of an asset in order to increase its market value.
In fact, the issuer buys its own tokens, which creates an artificial demand for them. Money is “chasing” from account to account, and the asset is becoming more expensive, at least that’s how it looks from the outside.
Some users have up to a thousand self-financed accounts. And while in most cases the commission outweighs the profits from the victims, a small percentage of such scammers make huge profits.
Moreover, this does not contradict the law, which “frees the hands” of other interested parties. There are many such examples.
And if the NFT community wants to grow, then it might be time for them to think about centralized management and regulation in order to make the segment more attractive to newcomers.
Earlier, we talked about how the US federal government sees cryptocurrency as a threat to national security.