Money Laundering in the Metaverse: NFTs, DeFi

From Money Laundering in the Metaverse: NFTs, DeFi

According to a recent analysis, 17 million Ethereum transactions between Q4 2017 and Q1 2022 were associated with both criminal and licit operations. The overall cyber money laundering activities increased by 30% in 2021 compared to 2020, with hackers laundering a total of US$8.6 billion in cryptocurrencies.

During this time, thieves have increasingly relied on DeFi protocols to launder money: DeFi protocols received 17% of all cryptocurrency transferred from illegitimate addresses in 2021, up from 2% in 2020.

NFT sales also reached over $25 billion in 2021, with individual devices selling for as much as $90 million. However, high-profile frauds in 2022, including a $600 million theft of NFT gaming business Axie Infinity in March and $2.8 million worth of NFTs taken from the Bored Ape Yacht Club’s Instagram account in April, have caused market concern.

Money Laundering has become a major issue in web3.0 platforms due to the absence of KYC verifications and AML screening methods being deployed into the loop. With these rising numbers, we address the key causes and solutions for Anti money laundering compliance in the metaverse.

Let us first learn What the web3.0 platform consists of and Why it’s easier to Launder Money in the Metaverse.

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