IDEAS home Printed from https://ideas.repec.org/a/eme/jfcpps/jfc-09-2022-0218.html
   My bibliography  Save this article

Space transition and the vulnerabilities of the NFT market to financial crime

Author

Listed:
  • Mohammed Al Shamsi
  • Deborah Smith
  • Kimberly Gleason

Abstract

Purpose - The purpose of this paper is to describe how non-fungible tokens (NFTs) can be used in the commission of financial crime, including money laundering and crypto-fraud schemes, using the framework of the Space Transition Theory. Design/methodology/approach - A literature review relating the Space Transition Theory to crime vulnerabilities related to NFTs is conducted and practical examples illustrating NFT schemes are provided. Findings - The authors find that the Space Transition Theory explains the evolution of financial crimes into the NFT space. The transformation of the art industry from the physical to the virtual space through NFTs underlies the criminal activity surrounding them. NFTs enable crime because of the flexibility, dissociative anonymity, lack of deterrence and anonymity. Research limitations/implications - Criminals can easily take advantage of the users’ limited knowledge of blockchain to defraud them of their money or tokens. These risks accentuate the need to adopt appropriate measures to augment the accountability of NFT transactions. Until such interventions are implemented, the NFT market remains a highly viable space for the perpetration of financial crimes. Practical implications - The dynamic nature of the cyberspace and fast-past underlying technology provide a greater chance to escape than crimes committed in the physical space. The state of security on NFT platforms has elicited concerns from diverse quotas. NFTs pose significant money laundering risks because of the lack of appropriate regulatory mechanisms, generating a need for enhanced oversight and enforcement of sectors of the economy in physical space vulnerable to abuse in the NFT space, including entities such as art galleries, museums, sports teams and luxury brands. Social implications - The Space Transition Theory is also supported in that norms and values regarding ethics and criminal actions in the physical space do not transfer to cyber space. Originality/value - The novelty aspect of this research is in applying the Space Transition Theory to financial crime schemes based on NFTs.

Suggested Citation

  • Mohammed Al Shamsi & Deborah Smith & Kimberly Gleason, 2023. "Space transition and the vulnerabilities of the NFT market to financial crime," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 30(6), pages 1664-1673, January.
  • Handle: RePEc:eme:jfcpps:jfc-09-2022-0218
    DOI: 10.1108/JFC-09-2022-0218
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JFC-09-2022-0218/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JFC-09-2022-0218/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1108/JFC-09-2022-0218?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Proelss, Juliane & Sévigny, Stéphane & Schweizer, Denis, 2023. "GameFi: The perfect symbiosis of blockchain, tokens, DeFi, and NFTs?," International Review of Financial Analysis, Elsevier, vol. 90(C).
    2. Dany EKA SAPUTRA & Nicoleta ISAC & Waqar BADSHAH & Cosmin DOBRIN, 2023. "Analysis of Potential Threats of NFTS (Non-Fungible Tokens) for National Security and Economic Resilience. A Case Study of Indonesia," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 24(5), pages 696-716, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jfcpps:jfc-09-2022-0218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.