When art goes virtual: what status for collectible NFTs under the current EU Anti Money-Laundering regime?
/What if we told you that you can buy a digital image of an ape wearing a crown and heart-shaped glasses for two and a half million? Well, you may find this a bit pricey. This does, however, not seem to be a common feeling as images of funny looking apes have sold, over and over, at stellar prices. This specific project is called Bored Ape Yacht Club (BAYC) and features 9999 images of apes, each one slightly different from all the others. The combined value of the collection is reportedly a dizzying 2.9 billion dollars. This is just one of the many non-fungible token (NFT) ventures that have been flourishing in the last few years.
Trade in NFTs represents a new market that features virtual goods at skyrocketing prices and apparently little regulation and oversight. With sums of this magnitude at stake, it is inevitable to think about the repercussions of this new market for illicit financial flows control. And indeed, NFTs receive increasing attention in the financial integrity arena. In its ‘2022 Crypto Crime Report’, Chain alysis, one of the most renowned crypto analytics companies globally, identified a growing relevance of NFTs to pursue money laundering and wash trading. This risk was confirmed by the latest virtual assets (VA) report published by the Financial Action Task Force (FATF) in June 2022. There, NFTs have been recognised as one of the key market developments to keep under close watch.
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