Money Laundering Might Taint NFTs Too, Prepare For Tighter Controls
Simon Chandler, 27 March 2021
While non-fungible tokens (NFTs) are certainly the big thing in crypto at the moment, they aren’t without their problems. Aside from accusations of hype and faddishness, NFTs also raise the familiar and thorny issue of money laundering.
Without much in the way of quantitative proof, detractors have linked the burgeoning NFT market with money laundering, with some people describing them as the “best money laundering method in the cryptocurrency world.”
However, industry players speaking with Cryptonews.com suggested that, while NFTs are open to money launderers, there’s currently nothing concrete to indicate that their use for laundering is significantly worse than it is in the traditional art world, or with other types of crypto. At the same time, they attest that the strict introduction of KYC/AML (know your customer / anti-money laundering) standards will help combat this emerging problem. Continue reading “Article: Money Laundering Might Taint NFTs Too, Prepare For Tighter Controls”
NFTs: Legal Risks from “Minting” Art and Collectibles on Blockchain
Quinn Emanuel Urquhart & Sullivan, LLP, 25 March 2021
The growth of NFTs in art has been fueled by its unique attributes. NFTs can allow artists to better monetize their work by selling NFTs directly online without middlemen. Access to a readily accessible online resale market could also mean that works gain value quickly. And unlike the traditional U.S. art market, artists may benefit from the rise in value of their work by incorporating commission requirements in the smart contracts that accompany NFTs (for example, the SuperRare NFT marketplace requires that creators receive a 10% commission when artwork continues to trade on the secondary market).
Some hope that NFTs will open up a new revenue source for artists, including underrepresented artists, either by allowing artists who traditionally do not sell in galleries to sell directly to buyers online, or by allowing artists to sell something in addition to their tangible works. For example, an artist could sell an NFT of the digital image of a painting or sculpture to one buyer, while selling the physical work to another buyer, allowing the artist an additional opportunity to profit from the work. Continue reading “Article: NFTs: Legal Risks from “Minting” Art and Collectibles on Blockchain”