**5.5 Miscellaneous public-law compliance issues**

Market illegal practices have been detected in recent years concerning the misuse and abuse of crypto-assets, particularly utility tokens and high value NFTs, as money-laundering vehicles. European authority (ESMA) and the U.S. Department of the Treasury have published recent studies on the facilitation of money laundering and terrorist financing through the NFT and stablecoin trade in ARTs. In the case of NFTs, digital art is involved as a relatively easy instrument for capital laundering, considering the volatility of art assets, which is extreme in the case of high-value art pieces, vulnerable to financial crimes.

In the realm of the administrative control of gambling, players pay for a chance to win betting on an NFT position traded on a secondary market. Such position may be deemed a "thing of value" potentially implicating gambling issues. The increased use of chance-based mechanics in games (e.g., lootboxes, casino games) has led to enhanced scrutiny under gambling mandatory laws and to class-action lawsuits. Many game publishers have prevailed those lawsuits filed against them when terms of service grant only a license to use an in-game currency or items in the game and prohibit their transfer or exchange. Such currencies and items have no value for gambling law purposes, but NFTs issued or promoted by gambling companies create true tradable cryptoasset in DeFi markets. That is why DLT-based games use few chance-based mechanics and more play-to-earn or user-generated content models.

Finally, other public-law related issues deal with market abuse. Within this scope, NFT insider trading policies should be completed and updated by NFT massive professional issuers and by DeFi marketplaces and brokers trading with NFT. Recent incidents of directors, top-level employees, and executives at NFT companies and marketplaces outline the need of engaging in specific preventive self-regulatory activity. NFT insider trading policies should restrict, condition, or even prohibit the intermediation, purchase, or sale of NFTs based on publicly reserved or undisclosed information, also prohibiting various types of token market manipulation (including underlying markets) by whistleblowing or manipulating the optimal prices by means of company NFT trades designed to distort the perceived price level or the trading volumes.
