The United States Treasury Department has published its inaugural finance risk assessment for nonfungible tokens (NFTs), aiming to provide regulators with deeper insights into potential risks and security concerns within the rapidly evolving market. The report identified several risks, including the possibility of terrorists using NFTs to finance operations, state actors funding nuclear proliferation through NFTs, money laundering, and risks to investors who may face theft, rug-pulls, or other fraud forms that have become well-known. The report emphasized that most of these illicit activities occur through fiat financing and transactions, rather than being unique to the digital asset space. “This
