Reported by: DAVID JOLLY

Attorney General Merrick Garland wants to expand the Bank Secrecy Act to non-fungible tokens to deter money laundering. 

In a report to President Joe Biden earlier this month, the US Justice Department warned that NFT players could be using the digital assets for illicit financing, by “self-laundering, a sequence in which criminals purchase an NFT with illicit funds and then resell to a purchaser who pays for it with clean funds unconnected to a prior crime.”

Application of the act “often turns on whether the transacted item qualifies as ‘value that substitutes for currency,’” the report notes, while “NFT platforms may take the view that this definition does not apply to their activities—and that they are thus not subject to” the act’s anti-money laundering and combating the financing of terrorism requirements. Further, many platforms fail to appropriately implement know-your-customer systems in a market where assets can change hands very quickly, it noted.

Read full report: https://news.bloombergtax.com/crypto/nfts-should-fall-under-anti-money-laundering-law-doj-says