This will take place on February 6, United States Department of the Treasury has released a report under the headline “Study of the facilitation of money laundering and terror finance through the trade in works of art.” In fact, only a tiny fraction of the 40-page document is dedicat to the “Emerging Digital Art Market,” by which the department understands the market for nonfungible tokens, or NFTs. But even just a passing mention of NFTs emerging in this context could have important implications for the tone and content of the ongoing regulatory discussion regarding the asset class.

The report’s findings

Although the overall tone isn’t alarming, it does not seem to be concerning for NFT. The report casually refers to the increasing interest in digital art markets from legacy institutional players as well as private investors. Nevertheless, several key points illuminate potential areas of regulatory anxiety with regard to this exploding sector of the digital asset industry, which, according to the Treasury’s estimates, generated $1.5 billion in trading volume in the first three months of 2021.

What are the actual risks?

Future of digital art