NFTs have seen a renaissance in recent weeks as market volumes have increased and high-profile selling continues with no signs of decline. Its proponents say it’s a sign of a “culture shift”, while others argue it’s more than meets the eye. That is, high prices may be driven by money laundering. Cardano (ADA) founder Charles Hoskinson shares his view on this situation and suggests that this is part of the event. However, Charles Hoskinson points out that this situation is not unique to crypto. So, is this a practice we should all smile at and endure?
Cardano founder explains how money launderers can use NFTs
When people think of NFTs, most think of the absurdity of paying hundreds, if not millions, for digital artwork. This is even more surprising when NFTs can be copied for free. cryptocoin.com As you can follow from the news, the sale of several NFT parts at attractive prices has brought this point back to the agenda recently. CryptoPunk sold for 1,600 ETH ($5.33 million) last month #Like 7252. and Fidenza # 313 sold 1,000 ETH ($3,335,000) last month.
Proponents argue that, although easily copied, the value proposition comes from the status conferred by property and the bragging rights that go with it. Still, for the average person on the street, this statement alone still doesn’t hold up when it comes to the selling price of the parts requested. The Cardano founder describes the current situation as either “irrational exuberance” or a money laundering tool. He adds that it is possible to use NFTs for money laundering because many platforms do not require detention and registration. He states that what usually happens is that the money launderer sells an NFT to himself using another account. By citing a legal source of after-sales revenues, he launders dirty crypto, says Charles Hoskinson, giving the following example:
How can you do that; you have this rock picture, you sell it to yourself through your other account, so “someone else”. This other person is buying that rock NFT, and you have actually just transferred money from an illegitimate source to a legitimate source.
Money laundering goes much deeper than NFTs
However, Charles Hoskinson points out that rather than being a crypto issue, it continues in other industries. Expanding on the topic, he says it’s common for real-world art to be used in money laundering under similar circumstances. He also cites “soft corruption” when it comes to paying the speaking fee:
“We’re going to pay you $100,000 to give a 30-minute talk or something. I don’t care what you talk about, you can talk about the weather.”
But as US regulators signal sweeping crypto reforms, NFTs are likely to come to the fore.
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