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Communications of the ACM

ACM TechNews

NFTs Increasingly Targeted by Criminals

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An NFT at a digital art show in Sydney, Australia, last month.

The report recommended proactive risk management to fend off criminal actors and highlighted the need to screen for sanctioned entities and keep them from using NFT platforms.

Credit: Brent Lewin/Bloomberg News

Blockchain analytics firm Elliptic warned criminals are increasingly targeting nonfungible tokens (NFTs), reporting the scamming of over $100 million worth of such blockchain-based assets during the past year.

Since 2017, more than $8 million in proceeds from illicit activities has been laundered via platforms enabling NFT creation, purchase, and sales.

Another $328 million originated from obfuscation services, including mixers that allow users to exchange cryptocurrencies relatively anonymously.

Elliptic disclosed that the Tornado Cash mixer platform originated about $137 million of cryptocurrencies processed by NFT marketplaces, and was "the laundering tool of choice" for 52% of NFT scam proceeds.

The report also said NFT-using platforms are under threat from sanctioned entities and state-sponsored groups, and recommended proactive risk management to fight off malefactors and screening for such entities.

From The Wall Street Journal
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