Money Laundering in Virtual Fashion Transactions: Challenges and Countermeasures
Virtual fashion NFTs are rapidly gaining traction—but with them come new regulatory blind spots. This project investigates how these assets can be exploited for money laundering and proposes a behavior-based scoring system and visual compliance dashboard to detect laundering risks on-chain.
What this project does:
Detects laundering patterns based on NFT wallet behavior
Uses network analysis to uncover coordinated activity
Builds a transparent, explainable dashboard for risk triage
What are Virtual Fashion NFTs?
Virtual fashion NFTs are blockchain-based digital clothing items—used to style avatars, for AR try-ons, or for collection and resale.
Unlike traditional NFTs, their value comes from aesthetics and brand association, not scarcity or tokenomics.
Why are they high-risk?
- Pseudonymity: Most NFT platforms do not require KYC or identity verification.
- Subjective Pricing: There are no clear benchmarks for asset value, allowing for manipulation.
- Fragmented Liquidity: Trades occur across low-volume, lightly regulated platforms.
Research Objectives
- Detect laundering behaviors based on on-chain wallet activity
- Develop a transparent rule-based scoring system
- Apply transaction graph analysis to uncover network risk structures
- Build a visual, lightweight dashboard for compliance triage
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