Space Transition and the Vulnerability of the NFT Market to Financial Crime

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. Furthermore, people who would not ordinarily commit crimes in the physical space may be compelled to do so in cyber space.Originality/value – The novelty aspect of this research is in applying the Space Transition Theory to money laundering schemes and other crime with NFTs