This online world is just reflection of irl, all that was happening before and will continue to happen - just the medium changes.
Ok that's enough philosophy.
Topic: NFTs illicit activities (Read 167 times)
$9 million in profits by wash traders? $1 million coming from illicit addresses? I have a feeling that Chainanalysis only scratched the surface with this report. NFT market is worth billions, so this report would actually mean that only a tiny fraction of NFT trades are illegal.
But anyway, illegal activity is not the only reason to stay away from NFT. The system itself is deeply flawed to the point where nothing useful can come out of it.
But anyway, illegal activity is not the only reason to stay away from NFT. The system itself is deeply flawed to the point where nothing useful can come out of it.
Source --> https://blog.chainalysis.com/reports/2022-crypto-crime-report-preview-nft-wash-trading-money-laundering/
If I quote this part, most of the illegal activities come from scam or theft, both of which are related to people's lack of awareness of the basics of protecting your currencies or random software downloads.
A lot of people when they hear about some people have become rich just by selling NTFs, they will start to be greedy and thus it will be easier for scammers to scam them.
As for linking it to some activities such as money laundering, art has an unknown value, and therefore it is difficult to say that it is money laundering.
government can ask for the source of funds or establish regulatory legislation (crazy tax,) especially since mixing ETH coins are harder than BTC.
In general, NFT industry is a little different from ICO but I don't see it as a long-term investment or something that have a value but rather a reflection of art that is not subject to a specific value.
And the patterns don't change. If in the NFT HYIP a user created an NFT token and bought it from himself for $100,000, and then resold it on the market for $50,000.
Now this is a very good scheme for the legalization of income. You buy your NFT tokens from unknown wallets and you have legal income.
Now this is a very good scheme for the legalization of income. You buy your NFT tokens from unknown wallets and you have legal income.
Yeah, nothing new here. Actually, nothing new about the concept of people doing illicit things on the back of serious technological achievements or social movements. Crypto has not been immune to this, basically tackling the same issues the internet has as it inherited its legacy. I doubt things will change even as tech gets better.
Chainanalysis is about 5 years too late. I've been warning about illicit purpose of "tokens" in general ever since 2017. In fact I've always said that one of the main reasons why Chinese government has been cracking down on exchanges is these illicit activities. It is too easy to launder money through tokens (ICOs in 2017 to NFTs today). It is also too obvious to notice it too if you look at how silly some of the prices are. For example an obvious garbage NFT that nobody even heard of sells for millions of dollars coming from a completely anonymous entity is a clear sign of the money being laundered.
This may not be the finest evidence but there are some truths in this, this is not yet about fake NFT stores or selling of fake NFTs, it is about illicit activities that people have used NFTs for. You can see this on this Chainanalysis report:
https://blog.chainalysis.com/reports/2022-crypto-crime-report-preview-nft-wash-trading-money-laundering/
I have been trying to link some illicit activities with NFTs but only few I saw before like fake stores and selling of fake NFTs, but thanks to Chainanalysis this time but I do not like them so much because they run their own nodes and track addresses but this is helping this time and I appreciate this report.
Crime and NFTs: Chainalysis Detects Significant Wash Trading and Some Money Laundering In this Emerging Asset Class
Wash trading
NFT sellers will sell NFT to themselves for their NFT to gain awareness so that others buyers will buy the NFTs from them. Some did it and gained. Read the report to understand better and how Chainanalysis analysed how some addresses are linked as buyers and sellers to be one same person or same people operating together.
The sellers will be the buyer to create hype to sell to victims. Victims will fall for the hype or high price and buy the NFT.
Money laundering
NFTs are getting clearer that it will breed more scam like DeFi. People can create NFT and sell it to themselves first at high price to find a victims and sell the NFT to the victim. See money laundering too.
https://blog.chainalysis.com/reports/2022-crypto-crime-report-preview-nft-wash-trading-money-laundering/
I have been trying to link some illicit activities with NFTs but only few I saw before like fake stores and selling of fake NFTs, but thanks to Chainanalysis this time but I do not like them so much because they run their own nodes and track addresses but this is helping this time and I appreciate this report.
Crime and NFTs: Chainalysis Detects Significant Wash Trading and Some Money Laundering In this Emerging Asset Class
Wash trading
Quote
Wash trading, meaning executing a transaction in which the seller is on both sides of the trade in order to paint a misleading picture of an asset’s value and liquidity, is another area of concern for NFTs.
NFT sellers will sell NFT to themselves for their NFT to gain awareness so that others buyers will buy the NFTs from them. Some did it and gained. Read the report to understand better and how Chainanalysis analysed how some addresses are linked as buyers and sellers to be one same person or same people operating together.
The sellers will be the buyer to create hype to sell to victims. Victims will fall for the hype or high price and buy the NFT.
Money laundering
Quote
Money laundering activity small but visible in NFTs
Quote
Value sent to NFT marketplaces by illicit addresses jumped significantly in the third quarter of 2021, crossing $1 million worth of cryptocurrency. The figure grew again in the fourth quarter, topping out at just under $1.4 million. In both quarters, the vast majority of this activity came from scam-associated addresses sending funds to NFT marketplaces to make purchases. Both quarters also saw significant amounts of stolen funds sent to marketplaces as well. Perhaps most concerningly, in the fourth quarter, we saw roughly $284,000 worth of cryptocurrency sent to NFT marketplaces from addresses with sanctions risk. All of that was due to transfers from the P2P exchange Chatex, which was added to OFAC’s SDN list last year.
NFTs are getting clearer that it will breed more scam like DeFi. People can create NFT and sell it to themselves first at high price to find a victims and sell the NFT to the victim. See money laundering too.
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