Digital asset tokenization can be used to reduce fraud and other financial crimes in a number of ways:
Increased transparency:
When assets are tokenized, all of the information about the asset and its ownership is stored on the blockchain. This makes it much more difficult to commit fraud or other financial crimes, as all of the transactions are transparent and publicly visible.
Reduced counterparty risk
When assets are tokenized, there is no need to rely on intermediaries such as banks or clearinghouses. This reduces the risk of fraud and other financial crimes, as there are fewer parties involved in each transaction.
Enhanced KYC/AML procedures
Tokenization platforms can implement robust KYC/AML procedures to verify the identity of users and prevent money laundering and other financial crimes.
Reduced market manipulation
Tokenization can make it more difficult to manipulate markets, as all of the transactions are transparent and publicly visible.