Dirty Money 💰

Dirty Money

If you’ve ever watched the hit Netflix series Ozark, then you know exactly what money laundering is. In Ozark, a clever accountant named Marty Byrde gets caught up in some drama and is forced to launder money for the cartel to save his family. Money laundering is the practice of converting vast sums of money earned from criminal activities into legitimate funds. This practice of converting dirty money into clean money is highly illegal and is a growing concern in the NFT community. 

Many investors who remain skeptical about NFTs often point out that they are used to launder money–and they are correct. According to a report released by blockchain data platform Chainalysis, a small but growing amount of activity on NFT marketplaces can be attributed to money laundering. How did Chainalysis determine this?

The company tracked the capital sent to NFT marketplaces from cryptocurrency addresses linked to illegal activities. They found roughly $1.4 million in laundered money in Q4 2021, up from about $416,000 in Q1 2021–over a 200% increase in under a year.

The $1.4 million in laundered money pales in comparison to the $8.6 billion in crypto-based money laundering Chainalysis detected last year. Still, NFT money laundering poses a threat to the building of confidence and trust in NFTs. As the popularity in NFTs grows, it’s important for marketplaces and regulators to monitor the space.

If you remain skeptical about NFTs, is money laundering one of your main concerns?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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