The regulatory treatment of NFTs remains one of the most unresolved questions in digital asset compliance. In 2026, the answer depends less on what an NFT is and more on what it does.
The regulatory treatment of NFTs remains one of the most unresolved questions in digital asset compliance. In 2026, the answer depends less on what an NFT is and more on what it does.
The FATF's sixth targeted update, published in June 2025, provides the clearest guidance to date. NFTs that are unique and primarily used as collectibles do not fall under the FATF's definition of virtual assets. However, jurisdictions should apply FATF VA standards to NFTs when they serve the same function as virtual assets — particularly when used for payment or investment purposes. This is a functional test, not a categorical one. A collectible NFT has a different regulatory treatment from a tokenised value transfer NFT.
The EU has taken a similar approach. Under the emerging framework, unique NFTs — art, collectibles, one-of-a-kind digital items — are currently excluded from the virtual asset classification. But companies providing NFT-related services may fall under the Anti-Money Laundering Directive 6 (AMLD 6), and the EU is preparing a comprehensive assessment and legislative proposal to formalise NFT regulation within eighteen months.
The money laundering risks are real. NFTs are vulnerable to several typologies that regulators are watching closely. Transactions through unhosted wallets operate outside VASP oversight, creating anonymity. Decentralised NFT marketplaces lack traditional AML controls. NFT pricing is inherently subjective, making it a natural vehicle for value transfer laundering — a buyer can pay an inflated price for an NFT to move funds to the seller without obvious commercial justification. Cross-chain bridging — moving assets across blockchains — creates traceability gaps that complicate monitoring.
For businesses operating in the NFT space — whether as marketplaces, creators, advisers, or service providers — the regulatory direction is clear even if the rules are still forming. The FATF's functional test means that businesses must assess whether their NFT activities cross the line into virtual asset territory. If an NFT platform facilitates transfers that function as payment or investment, the VASP obligations follow.
Marketplace operators that facilitate secondary trading of NFTs are under particular scrutiny. If the platform enables price discovery, matchmaking, and settlement, it is performing functions that look very much like those of a regulated exchange — and regulators will treat it accordingly.
The prudent approach is to assume that regulation is coming and to build compliance infrastructure now rather than retrofit it later. That means understanding where the regulatory perimeter sits for specific NFT activities, implementing CDD where required, and monitoring for the typologies that regulators have flagged.
At Kybri Consulting Limited, we advise digital asset businesses on the regulatory treatment of NFTs — from perimeter analysis and VASP assessment through to AML/CFT framework design and regulatory engagement.
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