Anti-Money Laundering Law Should Cover NFTs: Garland

Attorney General Merrick Garland wants to expand the Bank Secrecy Act to non-fungible tokens (NFTs) to deter money laundering following a DOJ report warning that NFT players could be using the digital assets for illicit financing.

Anti-Money Laundering Law Should Cover NFTs: Garland

Attorney General Merrick Garland wants to expand the Bank Secrecy Act to non-fungible tokens (NFTs) to deter money laundering following a DOJ report warning that NFT players could be using the digital assets for illicit financing, reports David Jolly for Bloomberg News. Criminals could use a method called self-laundering, a sequence in which they purchase an NFT with illicit funds and then resell to a purchaser who pays for it with clean funds unconnected to a prior crime.

The problem is exacerbated by the fact that many platforms fail to appropriately implement know-your-customer systems in a market where assets can change hands very quickly. The Justice Department said it supports amending the act to make clear that key obligations—including know your customer and suspicious transaction reporting—apply to platforms dealing in NFTs, including online auction houses and art galleries.