The world has witnessed huge growth in the NFT industry but the more the growth the less the compliance and regulatory concerns by the community. Many industries are continuously falling prey to many bad practices and every growing sector goes through the same thing. When it comes to NFTs, there are no exceptions either.
NFT sector is growing and attained $10.7 billion last year but the sudden sanctions on 57 cryptocurrency addresses and one exchange by the Treasury Department Office of Foreign Assets Control (OFAC) were shocking. There were allegations of money laundering and ransomware.
1. Darknet Markets
Latvia-based exchange Chatex was held responsible for nefarious transactions related to illicit and high-risk activities. Since NFTs began to pop up everywhere these activities are getting common. Many see the digital world as responsible for igniting these activities.
Multiple dirty wallets are utilizing their money behind the curtain — and compromising laws and regulations for everyone.
2. Better Compliance Infrastructure
There is no doubt in having a better compliance infrastructure to avoid high-risk criminal activities in the NFT sphere. Battle-coded regulatory and compliance protocols will eliminate the threats of hacking. It will also facilitate the newcomers in registering themselves to certain platforms and in transactions.
There is a possibility that we will be able to see a revolutionary compliance technology in the future years as the NFT sphere is blooming.
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Compliance helps in providing tools for authenticating users, acting as credentials, and even enabling people to own credit history.
This blooming NFT technology will surely provide a way to secure the repute of both users and the platform with the help of better compliance mechanisms. It will surely allow users to protect their personal information on a chain from threatening sources.
3. What Lies Behind?
As mentioned above, there is always a space for improvement, and the NFT sector is no exception. KYC and AML requirements will surely help in filtering the unwanted insecurities in the marketplaces and users’ profiles.
We might see the possibilities of NFT compliance protocols having a verification process for the transfers held on the network. Anyone suspected of carrying out illegal activities can be easily identified. The same level of protection can be applied to ETH and other currencies as well.
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