Report Launch: Assessing non-fungible tokens (NFTs): A resource guide for fraud practitioners

Perpetuity Research are pleased to share their latest report entitled “Assessing non-fungible tokens (NFTs): A resource guide for fraud practitioners” commissioned by the ACFE UK Chapter

The purpose of the research was to enhance the anti-fraud community’s understanding of the benefits and risks associated with non-fungible tokens (NFTs). NFTs are unique cryptographic tokens residing on the blockchain, representing both real-life and virtual assets. While they have existed for nearly a decade, these cryptoassets experienced a significant  explosion in 2021, and have remained popular ever since. To date, NFTs have predominantly evolved into a market centred on collectibles, including digital artwork, sports cards, personal memorabilia, and other rare items. However, it is essential to recognise that their potential extends far beyond these domains. Virtually anything that can be digitised has the potential to become an NFT, with the added benefit of streamlining processes, eliminating unnecessary intermediaries, and maintaining permanent records on the blockchain.

While NFTs have rapidly emerged in our economies, unfortunately, regulation and monitoring of these assets has not kept pace. Like any new phenomenon, NFTs have attracted criminal activity in the form of frauds and scams, as well as facilitating other types of crimes, such as money laundering. As a result, there is a genuine need to gain a deeper understanding of the risks associated with the NFT market, not only for consumers and investors but also for the counter-fraud sector.

This report aims to fill some of these gaps and serves as a valuable resource on the subject of NFTs. It offers a wealth of knowledge, making it an essential reference point for both fraud practitioners and anyone interested in NFTs.

Dr Janice Goldstraw-White, who led the research noted:

While it would be easy to regard that the risks associated with NFTs are not directly impacting on many business currently, our research has brought to light that NFTs have the potential to rapidly expand into more mainstream areas. Therefore, counter-fraud personnel would be well-advised to be proactive in familiarising themselves with this type of digital assets.

To view a copy of the full findings, please click here.