Formaldehyde is CH2O. It is commonly found in building materials and as a bacteria killer and (ahem) it is found in nail polish. Well, not all nail polish. Some brands (namely Zoya, Wet n Wild Fastdry, Finger Paints, Orly, etc.) do not contain formaldehyde and they are commonly nicknamed 4-Free. Don't quote me on this but I think that it might be one of the components that makes nail polish smell so strongly.
The reason that I am telling you all this is because it was on the news today. It was (finally) recognized by the United States government as a carcinogen. If you are like me and didn't know what the heck a carcinogen is, then it is something that has been proven to cause cancer. Before the U.S. had recognized it, Canada had declared it as a toxic material in 1999 and so did some countries in Europe.
Now this kinda gets me scared. For all you nail bloggies out there who swatch every day, use the 4-Free. I know I sound totally hypocritical saying that (because I don't use it myself) but as of now, I can't afford to continually buy polishes as expensive as Zoya.
Honestly, it has long been suspected to cause cancer. But until today (or yesterday) it was not officially declared. Girls (and boys), we have to be careful and use as little of not 4-Free nail polishes as we can. We have to try to keep ourselves from getting cancer.
The industrial chemical formaldehyde and a botanical known as aristolochic acids are listed as known human carcinogens. Six other substances — captafol, cobalt-tungsten carbide (in powder or hard metal form), certain inhalable glass wool fibers, o-nitrotoluene, riddelliine, and styrene — are added as substances that are reasonably anticipated to be human carcinogens. With these additions, the 12th Report on Carcinogens now includes 240 listings. It is available at http://ntp.niehs.nih.gov/go/roc12.
So you don't have to totally eliminate it, but use it as sparingly as possible please!