The Top 10  Most Difficult Countries for Identity Verification

The Top 10  Most Difficult Countries for Identity Verification

Download Report

AML Compliance – Addressing the Threat of Money Laundering in NFT Marketplaces

b-img-aml-comp

The NFT marketplace is flourishing even though the top platforms do not always comply with Anti-Money Laundering (AML) regulations.

This has paved the way for criminals to launder money while remaining anonymous through cryptocurrency.

More than $100M worth of NFTs were stolen from July 2021 to July 2022. Just in July 2022, 4,600+ NFTs were stolen, the biggest robbery in a month.

It’s high time for the industry players to assess the risks carefully and implement strategies to protect customers.

A Quick Overview of NFTs 

Non-fungible Tokens (NFTs) provide the buyer with ownership of a special digital asset. The ownership is documented on a blockchain, a decentralised ledger.

NFTs can take the form of music, drawings, or even Tweets. They are frequently considered to be the future of art collections since buyers have exclusive rights to digital assets instead of owning actual canvases.

What’s strange is that NFT owners cannot stop anyone from downloading or taking a snapshot of the art,  because they do not truly own the actual object.

Even though one cannot physically possess an NFT, but can sell it to another party via blockchain. There is no yardstick to measure the true value of an NFT. Art collectors can sell and resell the digital asset at a premium price.

In December 2021, digital artist PAK’s, The Merge, fetched a whopping $90 million. There is no certainty as to which art will take the crown for being the most traded.

Growth in the NFT Marketplace

The trading volume of Opensea, the world’s largest digital marketplace, is down by 99% as interest in the NFL has declined due to frauds and other misuse. However, it is still too early to predict the future of this industry. Statista claims that revenue in the NFT market is expected to reach $3.68 billion in 2023. The annual CAGR is projected at 22.91% from 2023 to 2027.

The Weeknd made nearly $2 million by selling NFTs of his unheard music, and Coca-Cola generated $575,00 through the sales of specialised wearable goods in the virtual metaverse of Decentraland.  Gucci, Adidas, Adidas, Nike, and other well-known brands have also issued NFTs and entering the virtual world where players can buy and sell digital artwork.

Volatility doesn’t hamper the NFT market. The international NFT space is anticipated to expand at a CAGR of 22.91% from 2023 to 2027. New players and laws will emerge five years down the road; therefore, novices to the market must start to address obvious risks and pitfalls now.

b-info-interest

Suggested Read: NFT Market Skyrockets to $44 Billion as Money Laundering Increases

Money Laundering Risks in NFT Marketplaces

AML advocacy organisations and Interpol have expressed concerns over NFTs. Since the NFT transactions are conducted the same way as cryptocurrencies, they become ideal for criminals to launder anonymously.

Money launderers can profit from the trading of forged NFTs, like the latest Banksy print. Additionally, criminals have the capability to hack user accounts on the NFT system, sell illegal tokens, and then wash the money they make. In other cases, NFTs are utilised to transfer money between illegal parties while concealing details about security flaws.

Suggested Read: NFTs Seek to Implement KYC/AML Standards as Money Laundering Rises

Proactive Measures to Addressing AML Risks in NFTs

NFT marketplace needs to be strongly regulated to reduce fraudulent attempts of money laundering.

Several possible preventative measures include:

Identity Verification

A crucial part of reducing the likelihood of NFT money laundering is confirming that consumers are who they claim to be. The first step is identity verification services, which checks the legitimacy of a prospective buyer or seller by cross-checking  with the government databases and anti-money laundering watchlists.

This forms a part of the complete LYC (Know Your Customer) verification process that ensures that customers who make transactions, do not end up dodging the system.

Following customer verification, two-factor authentication could help safeguard accounts. Companies that manage NFT funds or support transactions may utilise other authentication methods in addition to usernames and passwords, such as biometrics, USB keys, and one-time SMS messages.

Suggested Read: NFTs, Art Market – What Investors Need to Know About ID Verification

KYC/AML Compliance

Although KYC and AML standards do not currently apply to NFTs, proactive application is important to reduce money laundering and other financial crimes.

Businesses still need to be conscious of the consumer experience in this situation. Security precautions that disproportionately lengthen the time and effort it takes to register for an account or carry out an action might cause annoyance and even result in the loss of customers. Therefore, it’s crucial for companies to use continuous risk segmentation to strike the ideal balance between fraud protection and conversion.

Suggested Read: NFTs and Surging Crimes – How Shufti’s AML/KYC Solution Can Secure The Digital Ecosystem

Other Cyber Security Measures

Frequently examine the user database to identify connections between different accounts. For instance, when numerous accounts are opened with the same IP address, it could be a sign that they are being utilised for illegal operations like NFT wash trading.

It is quite challenging to find patterns like these manually. Here, automated solutions support the evaluation procedure and make it easier to uncover fraud rings and other forms of illegal, linked accounts.

Suggested Read: Money Laundering in the Metaverse – NFTs, DeFi, and the Role of Shufti’s AML Solutions

Key Takeaways

Despite the uncertainty about NFTs’ future, it can be argued that these digital assets pose a threat of money laundering.

NFT marketplaces cannot continue operating without a proper KYC and CDD mechanism in place. Art is already one of the top preferred methods of money laundering for fraudsters. Digital art is only going to fuel this crime, until regulated.

It is important to take proactive measures to authenticate consumers without slowing down or complicating the speed and ease of digital transactions to limit the likelihood of criminals utilising NFTs to hide financial crimes.

Want to learn about Shufti’s AML Screening solution for NFT marketplaces? 

Connect with an AML Expert

Related Posts

Blog

Curbing Financial Crimes and Securing Art Market With Shufti’s AML Screening Services

The global art industry is embracing digitization. However, the technological advancements and a ...

Curbing Financial Crimes and Securing Art Market With Shufti’s AML Screening Services Explore More

Blog

Transaction Screening: The Benefits and Challenges

Financial crimes are rising, wreaking havoc on organisations and individuals. The fraud rate has ...

Transaction Screening: The Benefits and Challenges Explore More

Blog

Two-Factor Authentication – A Firewall Against Social Engineering Attacks

Businesses and financial institutions around the globe often report concerns of financial crimes ...

Two-Factor Authentication – A Firewall Against Social Engineering Attacks Explore More

Blog

Top 5 Payment Trends Transforming the Commerce Sector in 2021

Financial markets across the globe saw many unpredictable changes due to the pandemic last year. ...

Top 5 Payment Trends Transforming the Commerce Sector in 2021 Explore More

Blog

Identity checks – A Profitable Business Strategy or Another Business Expense?

Online commerce is a necessity of every business these days. With nearly every consumer carrying ...

Identity checks – A Profitable Business Strategy or Another Business Expense? Explore More

Blog

Facial Recognition to Reshape the Retail Industry in 2020

The explosion of facial recognition technology in our smartphones – for instance in iPhone ...

Facial Recognition to Reshape the Retail Industry in 2020 Explore More

Blog

Prevailing Financial Crimes and AML Regulation in Argentina – How Shufti Can Help

Argentina has faced many significant challenges due to its geographical location, including the f...

Prevailing Financial Crimes and AML Regulation in Argentina – How Shufti Can Help Explore More

Blog

OCR in Banking | Automating Data Extraction, Customer Onboarding, and ID Verification

The global Banking and Financial Services Industry (BFSI) is one of the most heavily regulated an...

OCR in Banking | Automating Data Extraction, Customer Onboarding, and ID Verification Explore More

Blog

Anti Money Laundering – What is AML compliance and why is it important?

Anti-money laundering compliance is vital for obliged entities and being conversant with AML comp...

Anti Money Laundering – What is AML compliance and why is it important? Explore More

Blog

Non-Fungible Tokens (NFTs), Financial Crimes and AML/KYC Regulations – How Shufti Can Help

Non-Fungible Tokens (NFTs) emergence is providing a whole new segment to buy or sell digital crea...

Non-Fungible Tokens (NFTs), Financial Crimes and AML/KYC Regulations – How Shufti Can Help Explore More

Blog

Digital ID Verification – Why is it Critical for Customer Experience?

Last year was all about lockdown and pandemic disrupting business operations to the very core. Th...

Digital ID Verification – Why is it Critical for Customer Experience? Explore More

Blog

Fintech 2021 – A Brief Insight of Global KYC Regulations

Financial services are among the most heavily regulated sectors in the world, and the number one ...

Fintech 2021 – A Brief Insight of Global KYC Regulations Explore More

Blog

Online Identity Verification: 5 Trends to Expect in 2021

The boom in digitisation forced businesses to opt for digital means of operations. Online busines...

Online Identity Verification: 5 Trends to Expect in 2021 Explore More

Blog

Know Your Patient (KYP) – the next big thing in health care

Its high time the hospital industry must think beyond providing just giving medical assistance to...

Know Your Patient (KYP) – the next big thing in health care Explore More

Blog

5-Steps to Improve Customer Due Diligence Process

The digital age has witnessed a new wave of financial fraud. It is estimated that $4.7 trillion o...

5-Steps to Improve Customer Due Diligence Process Explore More

Blog

Leveraging Age Assurance for Data Privacy and User Protection

Online age verification has gained great attention in recent years since many minors have been se...

Leveraging Age Assurance for Data Privacy and User Protection Explore More

Blog

Prevailing Crimes in Identity Verification – How Shufti’s Forensic Document Verification Can Help

Identity fraud has become quite prevalent in digital businesses which is not only affecting opera...

Prevailing Crimes in Identity Verification – How Shufti’s Forensic Document Verification Can Help Explore More

Blog

Secure Ride-Hailing Services – Building Trust Through NFC Verification

Despite the fact that modern ridesharing has only been operating for approximately a decade, it h...

Secure Ride-Hailing Services – Building Trust Through NFC Verification Explore More

Blog

Fighting identity fraud with AI-enabled ID document verification

It’s no secret that identity fraud has become one of the most increasing problems for online busi...

Fighting identity fraud with AI-enabled ID document verification Explore More

Blog

January 2023 Recap: Major Events Worldwide and How AML Verification Solution Can Help

Noncompliance with Know your Customer and Anti Money Laundering (KYC) regulations continue to pla...

January 2023 Recap: Major Events Worldwide and How AML Verification Solution Can Help Explore More

Blog

How Optical Character Recognition is Changing the Financial Industry

Banking and other financial services are the world’s most closely watched and strictly gove...

How Optical Character Recognition is Changing the Financial Industry Explore More

Blog

KYCC – Going an Extra Mile to Prevent Financial Crimes

As cases of money laundering and terror financing are increasing globally, the concerns to overco...

KYCC – Going an Extra Mile to Prevent Financial Crimes Explore More

Blog

Cross Border Digital Payments – Regulatory Regime and the Global Context

The world is moving towards smarter payments with technology trends picking up the pace in 2021. ...

Cross Border Digital Payments – Regulatory Regime and the Global Context Explore More

Blog

Top 5 Use Cases of Face Verification in the Digital Age

As novel applications and products are released every day, the use cases of face verification tec...

Top 5 Use Cases of Face Verification in the Digital Age Explore More

Blog

AML & KYC Compliance – 5 Ways AI is Supporting the Fight Against Financial Crimes

  Reforming AML & KYC Compliance Structures for Financial Institutions The capabilities ...

AML & KYC Compliance – 5 Ways AI is Supporting the Fight Against Financial Crimes Explore More

Blog

Shufti Marks 4 Years of Streamlining KYC and AML for Global Businesses

October 2021 marks four complete years since the launch of Shufti. As years begin to stack, t...

Shufti Marks 4 Years of Streamlining KYC and AML for Global Businesses Explore More

Blog

Evolving Regulations Shaping Digital Crypto Ecosystem – How Shufti Can Help

Since the start of civilization, humans have used money in several different ways, and throughout...

Evolving Regulations Shaping Digital Crypto Ecosystem – How Shufti Can Help Explore More

Blog

Enhancing security in the cryptocurrency world with KYC verification

Almost 20 years after the legislation on combating money laundering, regulators around the world ...

Enhancing security in the cryptocurrency world with KYC verification Explore More

Blog, Financial Crime / AML, Identity & KYC

All You Need To Know About KYC Compliance

Financial crimes are increasing at an immense pace. As per the United Nations Office of Drugs and...

All You Need To Know About KYC Compliance Explore More

Blog

Identifying and Combating Trade-Based Money Laundering with Shufti AML Screening Services

The crime involved in trading is as old as human history. Where there is trade there is money inv...

Identifying and Combating Trade-Based Money Laundering with Shufti AML Screening Services Explore More

Blog

Digital KYC to Trace and Tackle High-Risk Customers

Customers are the assets and building blocks of any business. Customers are responsible for takin...

Digital KYC to Trace and Tackle High-Risk Customers Explore More

Blog

Fraud Prevention – Challenges, Strategies, Best Practices, and Technologies

The twenty-first century is by far the most revolutionary time in the history of humans in terms ...

Fraud Prevention – Challenges, Strategies, Best Practices, and Technologies Explore More

Blog

Shufti donates 10 million free ID verifications to help fight fraud amid COVID-19

Coronavirus took the world into clutches forcing people to adopt isolation and businesses are com...

Shufti donates 10 million free ID verifications to help fight fraud amid COVID-19 Explore More

Blog

Identity verification in social media – Lighting up the dark side

Social media is a word every one of us can relate to. With every passing day, it is penetrating i...

Identity verification in social media – Lighting up the dark side Explore More

Blog

Top 5 Ways Minors Use to Dodge Age Verification Checks

Protecting minors from the perils of the digital world is nearly impossible for businesses withou...

Top 5 Ways Minors Use to Dodge Age Verification Checks Explore More

Blog

Key Takeaways from Shufti’s Global Identity Fraud Report 2020

 After the rollercoaster year 2020, Shufti hopes this year will be less distressing for every...

Key Takeaways from Shufti’s Global Identity Fraud Report 2020 Explore More

Blog

Online Identity Verification – How to Secure Online Gaming & Gambling Platforms

Online gambling is the way to go for betting enthusiasts nowadays and brings both convenience and...

Online Identity Verification – How to Secure Online Gaming & Gambling Platforms Explore More

Blog

AUSTRAC’s ML/TF Risk Assessment Report on Major Banks [Part 1]

Back in September 2018, the Australian Government provided AUD 5.175 million funding to AUSTRAC f...

AUSTRAC’s ML/TF Risk Assessment Report on Major Banks [Part 1] Explore More

Blog

KYC and Blockchain – The Foundation of a Secure Crypto Landscape

Blockchain technology has demonstrated fast-paced growth throughout the world and now faces the c...

KYC and Blockchain – The Foundation of a Secure Crypto Landscape Explore More

Blog

Working from Home Spikes Demand for Digital Identity Verification

Due to the Coronavirus Pandemic, many businesses are grounded or are enforced to work from home. ...

Working from Home Spikes Demand for Digital Identity Verification Explore More

Blog

Latest Gaming & Gambling Regulations Worldwide and the Role of Age Verification

Online gaming has become more popular since COVID-19. The pandemic forced people to stay indoors,...

Latest Gaming & Gambling Regulations Worldwide and the Role of Age Verification Explore More

Blog

AML/KYC 2020 – how 2019 changed the landscape of global regimes?

Copy pasting your 2019 AML/KYC compliance strategy to 2020 plan will not do the job. Businesses n...

AML/KYC 2020 – how 2019 changed the landscape of global regimes? Explore More

Blog

Investor Onboarding | Navigating the Challenges of Digitization

Private market companies are setting their sights on retail investors and exploring technology an...

Investor Onboarding | Navigating the Challenges of Digitization Explore More

Blog

Augmented Intelligence – What 2019 have for AI systems?

Admittedly, Artificial Intelligence or AI has gained a considerable amount of ill reputation from...

Augmented Intelligence – What 2019 have for AI systems? Explore More

Blog

Top 10 Identity Verification Trends to Look Out for in 2022

Did you know identity fraud is growing at a faster than ever rate? Businesses across the globe ar...

Top 10 Identity Verification Trends to Look Out for in 2022 Explore More

Blog

COVID Passports – Bringing Convenience to the Travel & Tourism Sector

“Sorry, the earth is closed today.”  Tony Stark’s sarcastic dialogue became the worst possible re...

COVID Passports – Bringing Convenience to the Travel & Tourism Sector Explore More

Blog

Top 5 Reasons Why Businesses Need Transaction Monitoring Solution

Companies are moving towards digitisation, meanwhile, cybercriminals are mastering the art of exp...

Top 5 Reasons Why Businesses Need Transaction Monitoring Solution Explore More

Blog

August 2023 Recap: Major Violations and How AML Screening Can Help

With technological advancement, scammers are revising their strategies to bypass verification sol...

August 2023 Recap: Major Violations and How AML Screening Can Help Explore More

Blog

The ‘What’ and ‘How’ of Address Verification Service

The rising number of chargebacks and other fraudulent activities has led organisations to develop...

The ‘What’ and ‘How’ of Address Verification Service Explore More

Blog

Antiquities Market – A Conduit of Money Laundering and Terror Financing

Money laundering and terror financing through art and antiquities has been a concern of regulator...

Antiquities Market – A Conduit of Money Laundering and Terror Financing Explore More

Anti Money Laundering, Blog, Financial Crime / AML, Identity & KYC

Winter is Coming: With a Storm of KYC and AML Regulations

The ever-evolving regulations are creating challenges and complexities for the financial institut...

Winter is Coming: With a Storm of KYC and AML Regulations Explore More

Blog

AI face recognition for total automation

Face recognition is everywhere but still we’re unable to say goodbye to document, maybe because w...

AI face recognition for total automation Explore More

Blog

KYC/AML Compliance for Startups in the Financial Sector – How Shufti Can Help

As technology continues to transform the financial industry, the need for identity verification h...

KYC/AML Compliance for Startups in the Financial Sector – How Shufti Can Help Explore More

Blog

Biometric Facial Recognition – Combating Identity Fraud with Shufti’s IDV Solution

Since knowledge-based authentication and passwords were first introduced, security systems in ban...

Biometric Facial Recognition – Combating Identity Fraud with Shufti’s IDV Solution Explore More

Blog

Understanding the Key Role of Risk Assessment in the Crypto Industry

Cryptocurrencies are becoming a hotspot for scammers to perpetrate financial crime. Over 46,000 i...

Understanding the Key Role of Risk Assessment in the Crypto Industry Explore More

Blog

Panama Moves Forward With New Crypto Bill – A Step Towards Legalizing Digital Assets

Cryptocurrencies have been around for a decade now. As new technologies are emerging, criminals a...

Panama Moves Forward With New Crypto Bill – A Step Towards Legalizing Digital Assets Explore More

Blog

UK’s Digital Identity Framework – Cornerstone of Reliable ID

In today’s technology-driven era, digital identity is becoming inevitable. Physical interactions ...

UK’s Digital Identity Framework – Cornerstone of Reliable ID Explore More

Blog

The UK “Children’s Code” – Laying New Grounds for Age Verification

A 12-month grace period for compliance with a set of standards, introduced for protecting childre...

The UK “Children’s Code” – Laying New Grounds for Age Verification Explore More

Blog

Secure Ride-Hailing Services – Building Trust Through NFC Verification

Despite the fact that modern ridesharing has only been operating for approximately a decade, it h...

Secure Ride-Hailing Services – Building Trust Through NFC Verification Explore More

Blog, Identity & KYC

How ID Verification via OCR can transform Digital World?

ID verification is hailed as the ultimate savior for businesses operating multiple digital channe...

How ID Verification via OCR can transform Digital World? Explore More

Blog

7 Trends in Identity Verification Solutions to look for in 2020

Internet is an anonymous space where people can hide their identities and come up with bizarre ps...

7 Trends in Identity Verification Solutions to look for in 2020 Explore More

Blog

Forex | The Use of Identity Verification

In addition to safeguarding clients, forex brokers have legal and regulatory obligations to uphol...

Forex | The Use of Identity Verification Explore More

Blog

Biometric Authentication: Use Cases and Advantages

What is Biometric Authentication? Biometric authentication refers to the process of using unique ...

Biometric Authentication: Use Cases and Advantages Explore More

Blog

August 2023 Recap: Major Violations and How AML Screening Can Help

With technological advancement, scammers are revising their strategies to bypass verification sol...

August 2023 Recap: Major Violations and How AML Screening Can Help Explore More

Blog

KYC Isn’t Enough: Get Ready for the Future of Verification

Over the past few years, companies have been looking for more sophisticated identity verification...

KYC Isn’t Enough: Get Ready for the Future of Verification Explore More

Blog, Online Marketplace

Industrial significance of KYC / AML Compliance in 2019

As the type and amount of fraudulent activities have increased over the years, governments and re...

Industrial significance of KYC / AML Compliance in 2019 Explore More

Blog

Solving the Cheating Problem in Online Gaming with Robust ID Verification Solution

The digital gaming and esports industry has grown at an immense pace in recent years, topping 1 b...

Solving the Cheating Problem in Online Gaming with Robust ID Verification Solution Explore More

Blog

Top 7 COVID-19 Related Scams and Frauds to Look For in 2021

It has been more than a year since the COVID-19 pandemic took the world by storm. Where the globa...

Top 7 COVID-19 Related Scams and Frauds to Look For in 2021 Explore More

Blog

Online Identity Verification – How to Secure Online Gaming & Gambling Platforms

Online gambling is the way to go for betting enthusiasts nowadays and brings both convenience and...

Online Identity Verification – How to Secure Online Gaming & Gambling Platforms Explore More

Blog

Top KYC Compliance Laws to Follow in 2023

The rising number of scams has put a dent in the financial sector’s reputation. More than t...

Top KYC Compliance Laws to Follow in 2023 Explore More

Blog

The Emerging Threat of DeepFakes and the Role of Video KYC

With technological advancement, cybercriminals are revising their strategies to commit fraud. Cri...

The Emerging Threat of DeepFakes and the Role of Video KYC Explore More

Blog

COVID Verification of Tourists: Is the Hospitality Sector Doing Much?

COVID-19 has been a big hassle for everyone except for those who adopted the new normal quickly. ...

COVID Verification of Tourists: Is the Hospitality Sector Doing Much? Explore More

Take the next steps to better security.

Contact us

Get in touch with our experts. We'll help you find the perfect solution for your compliance and security needs.

Contact us

Request demo

Get free access to our platform and try our products today.

Get started