Reported by: FinTech Global

Despite their growing interest across investors, there are still huge challenges around money laundering with NFTs.

In a recent post by Alessa, the company explained more about money laundering in the NFT space and how to deal with it.

What qualities make the tokens attractive to money laundering? Alessa cited pseudonymous trading, open access, being highly mobile and subjective pricing as key qualities.

Alessa remarked that money laundering aims to legitimize money with illegitimate origins, and NFTs can contribute to that process.

The company explained that one common NFT money laundering technique is a form of wash trading, where someone buys an NFT they already own using different private keys. A launderer buys a low-priced token using one set of cryptographic keys. They or a trusted third party then rebuys it using criminal proceeds with different keys, creating a sale record and demonstrating a legitimate source for their money. They then sell the NFT to an unsuspecting buyer. If the launderer is careful, connecting both sets of keys to the same individual is almost impossible.

Read full report: https://fintech.global/2023/02/16/what-you-need-to-know-about-nft-money-laundering/