The use of NFTs for illicit activities has increased in recent months, but the volumes remain relatively small, analyst firm Chainalysis said.
A noticeable increase in illegal transactions using NFTs was recorded in Q3 2021. If in the second quarter such transactions were carried out in the amount of about $200,000, then in the next quarter the volumes jumped to $1.25 million. In the fourth quarter, the figure grew a little more – to $1.4 million.
In addition, transactions with “sanctioned” assets were recorded in the III and IV quarters. We are talking about cryptocurrencies that are transferred to NFT trading platforms from addresses associated with countries and organizations under sanctions.
Chainalysis analysts noted that although the volume of illegal transactions using NFTs increased in 2021, this is a “drop in the bucket” compared to the total volume of cryptocurrencies used for money laundering.
Chainalysis analysts did not say which specific platforms for trading collectible tokens were included in the study. However, the company tracked that smart contracts of the ERC-721 and ERC-1155 standards received $44.2 billion in funds in 2021. For comparison, in 2020 this figure was $106 million. It also seems that only blockchain platforms were included in the research. Ethereum.
Analysts also emphasize that in the field of NFT there are often cases of “pumping volumes” – when sellers of tokens buy them from themselves in order to artificially increase their price and attractiveness in the market. In total, Chainalysis has tracked 262 such traders. At the same time, 152 addresses were in the red for a total of $416,984, and 110 traders made a profit of $8,875,315.
It is worth noting that NFT trading is not regulated, and officially this practice is not prosecuted by law. Chainalysis previously reported that in 2021, criminals laundered $8.6 billion of illegally obtained funds using cryptocurrencies. The growth compared to 2020 was 25%.
Source: Bits
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