Non-fungible tokens are prone to fraud and scams, the U.S. Treasury Department said in its first risk assessment analyzing illicit finance and NFTs. 

Bad actors can use NFTs to launder funds, but those tokens are seldom used for terrorist financing, the Treasury said in its 29-page report released on Wednesday. Authorities should consider rules or guidance specific to NFTs, the department added in the report.

"The assessment finds that NFTs are highly susceptible to use in fraud and scams and are subject to theft. The report determines that illicit actors can use NFTs to launder proceeds from predicate crimes, often in combination with other methods to obfuscate the illicit source of proceeds of crime," Treasury said in a statement. "It also found little evidence of the misuse of …