The creator of NBA Top Shot and CryptoKitties is teaming up with the blockchain intelligence firm to focus on regulation, money laundering and market manipulation.
Blockchain data firm Chainalysis has teamed up with the creators of CryptoKitties and NBA Top Shot to track its NFT sales in order to ensure regulatory compliance.
Dapper Labs is a leader in non-fungible tokens, having launched the NFT market craze with the CryptoKitties breeding game in 2017, and then bringing it mainstream with NBA Top Shot’s video highlight clips, which have been sold and resold more than nine million times, according to DappRadar.
With the NFT ecosystem undergoing “rapid growth and transformation… [that will] attract widespread adoption,” Chainalysis warned more scrutiny is needed. It said:
“Growing consumer access to cryptocurrency requires a careful examination of the funds being used to purchase NFTs and the use of a comprehensive compliance monitoring solution that can help detect and prevent NFT money laundering and market manipulation.”
Just the top three NFT collections — Axie Infinity, CryptoPunks, and Art Blocks — have racked up more than $12 billion in sales, DappRadar said.
“NFTs are one of the most exciting spaces in cryptocurrency, but they will only be successful in the long-term if we can ensure a safe environment for our customers,” said Naeem Bawla, Dapper Labs’ associate director of compliance. He added:
“We’re thrilled to partner with Chainalysis to keep potential bad actors off our platform, combat money laundering, and at the same time, stay on top of the quickly-evolving local and global regulatory and compliance space.”
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
Beyond Avatars and Slam Dunks
NFTs are largely used for art, gaming, and collectibles at present, but there are many more potential uses, from tokenizing stock to fractionalizing everything from real estate to casks of Scotch whisky. International payments firm Ripple this week announced a $250 million fund to bring new NFT use cases to market.
Chainalysis Co-Founder and Chief Strategy Officer Jonathan Levin said the company is looking beyond the current NFT use cases:
“Ultimately, our team at Chainalysis is preparing for a world where all types of value will flow on blockchains: art, gaming, business transactions, and other other uniquely engaging digital experiences.”
Earlier this week, Chainalysis announced that it acquired Excygent, a firm that works with government agencies for cybercrime investigations, as well as data processing and lead generation. The two companies collaborated on several high-profile cases, tracking terrorism fundraising, child pornography, and illicit dark market sales.
