According to a Chainalysis report, some owners of NFT are taking advantage of the low regulation of these non-fungible tokens to obtain extra profit based on illegal activities in general, such as money laundering.
The data signature blockchain highlights two widely used techniques to increase the value of these digital assets, such as buying and selling by the same owner.
What is Wash trading, one of the two practices used by owners of NFTs
One of these activities is known as ‘wash trading’ and consists of carrying out transactions in which the owner is both the seller and the buyer of the NFT.
The objective is increase their value to attract the attention of buyers who wish to invest in these properties. It is a simple technique, as the owner only has to register for a digital wallet and connect it to an NFT trading platform that does not require personal identification.
Chainalysis, following previous research, has found that an approximate of 260 users have performed this technique more than 25 times. Specifically, a group of 110 prominent NFT owners earned approximately USD$ 8.9 million in profits when carrying out laundering operations.
Likewise, the software company in Singapore mentions that “most likely, those $8.9 million is derived from sales to unsuspecting buyers who believe that the NFT they are purchasing has been growing in value from one different collector’s sale to another.”
Is it legal or illegal to wash trade NFTs?
The problem with this technique, as Chainalysis points out, is that it is currently in a legal vacuum.
That is to say, it is clearly illegal, because it misleads buyers. However, and at least so far, There is no regulation that sanctions this conduct.
This can cause many users to lose confidence in this type of market, since it is hard to tell if an NFT is increasing in value due to popularity or wash trading.
At the same time, the blockchain data company points out that it also There are money laundering practices through the purchase of NFTs with illicit profits.
Specifically, these are transactions involving cyber criminalswho earn revenue from scams or malware and buy digital assets with that money.
Chainalysis research mentions that the profit associated with this type of transaction was USD$1 million in the third quarter of 2021 and reached the USD$1.4 million in the fourth quarter of the year.
The website that collects all NFT images for free
The purchase or even the search for them can become a complex process if you are not a person steeped in the subject; however, that already has a solution, because a user has decided to compile a large bank of NFT images that users can access for free.
The idea copies the design of the renowned site ‘The Pirate Bay’ that allows its users to download all kinds of multimedia content, on this occasion, thousands of images belonging to Non Fungible Tokens were made available to the public with the aim of questioning the concept of property rights of digital assets.
NFT Bay It was created by Australian developer Geoffrey Huntley, who compiled all the images associated with non-fungible tokens on Ethereum and Solana.
The result of said “educational art project” according to Hustley, is something he calls the torrent of “The Billion Dollars” referring to the large sums for which these digital assets are acquired.
Within the website people will be able to search for images, gifs and files in a series of categories such as “CrytoPuppies”, “Bored Ape Yacht Club”, “CryptoPunks”, “Axie Infinity” or “Farmers World” which are some of the most relevant NFT collections of the moment.
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