EU Targets NFT Money Laundering; Warner Music Group Plays Along

In case you are of the opinion that the prices people are willing to pay for collectable profile picture (PFP) non-fungible tokens (NFTs) have returned to sanity levels, be aware that someone just paid about $4.5 million for CryptoPunk No. 2924, an 8-bit pixelated monkey.

The seller was reported to be “0x1da533” and the buyer “0x9045de,” the CryptoPunks Bot Twitter account said on Sept. 28.

Punk 2924 bought for 3,300 ETH ($4,451,633.94 USD) by 0x9045de from 0x1da533. https://t.co/bh7Rjs9Aob #cryptopunks #ethereum pic.twitter.com/PT9v9bCC5s

— CryptoPunks Bot (@cryptopunksbot) September 28, 2022

Speaking broadly, there is concern that the high prices paid for NFTs like CryptoPunks — which currently have a base price of about $90,000 and an average price of about $150,000 — makes them a prime target for money launderers and wash traders.

Certainly, there have been some suspicious sales, most notably the $529.77 million “paid” last year for a CryptoPunk in a “flash sale” — a type of decentralized finance (DeFi) transaction in which crypto is borrowed, used and repaid in the same transaction — in which the buyer and seller were the same person.

To curb this, the European Parliament is considering adding NFT transactions to the list of crypto assets and service providers that would be required to carry out anti-money laundering (AML) checks and filings, according to a recent report.

Along with a variety of DeFi services and the decentralized autonomous organizations (DAOs) that govern them, platforms and individuals trading in NFTs holding artworks or PFPs, as well other items like music, videos and documents like equities or real estate titles, would be required to collect customer data from any transaction of €1,000 or more, CoinDesk reported.

Read more: Today in Crypto: EU Lawmakers Target DeFi

They would be added to existing “obligated entities like banks, real estate agents and gem traders.”

“The metaverse offers new opportunities for criminals who can convert cash acquired through illegal activities into non-traceable currencies to purchase and sell virtual real estate, virtual lands and other high-demand goods,” that are created on NFTs in blockchain-based metaverses, it added.

Meanwhile, Japanese Prime Minister Fumio Kishida said in a policy speech this week that the government’s push for the “social implementation of digital technology” would include “efforts to expand the use of Web3 services that utilize the metaverse and NFTs.”

Jazz up Fans

Among the many businesses using QR codes to facilitate crypto payments is the NBA’s Utah Jazz, which has attached code stockers to every seat in its arena. Fans can scan the codes to buy official team NFTs at its exclusive marketplace, run by crypto exchange CoinZoom.

“The NBA team wanted to offer NFTs to reward their fan base, but they didn’t want them to have to go through this arduous process to do it,” Todd Crosland, founder and CEO of Salt Lake City-based CoinZoom, told PYMNTS.

Buying NFTs on a number of major NFT marketplaces has typically been a multi-step process that has generally included purchasing ether (ETH) coins to make the acquisition.

WMG NFT Expansion

Warner Music Group announced a partnership with top NFT marketplace OpenSea that will “provide a platform for select WMG artists to build and extend their fan communities in Web3,” the company said on Sept. 29.

“Fundamental to music’s DNA, is community — it’s artists and fans coming together to celebrate the music that they love,” said Oana Ruxandra, the label’s chief digital officer and executive vice president of business development. “Our collaboration with OpenSea helps to facilitate these communities by unlocking Web3 tools and resources to build opportunities for artists to establish deeper engagement, access, and ownership.”

Warner Music has also moved aggressively into the metaverse, setting up a venue and theme park in The Sandbox at the beginning of the year and promising in-world concerts from top names ranging from Bruno Mars to Metallica.

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