What Is NFT KYC?

NFTs are decentralized assets that derive their value from both creators and the fluctuating market. To operate legally, platforms facilitating NFT trade must comply with relevant regulations. Unfortunately, the nature of NFT trading has raised concerns about potential money laundering activities. For instance, individuals may buy an NFT for a large sum and then sell it to another account for a lower amount to minimize their tax obligations. Exploiting this area for money laundering is just one example of the risks involved. Implementing KYC (Know Your Customer) technology can help NFT marketplaces collect necessary user information for payments, adhering to diverse global financial regulations. By doing so, marketplaces can create a secure, cost-effective solution that mitigates the risk of criminal exploitation.