The NFT Money Laundering Business Model
Does the IRS go after the rich who are laundering money in the art market? NO.
The IRS Admits It Doesn’t Audit the Rich Because It’s Too Hard
The entire #NFT scam is business as usual in the art world.
The marketplace that is in the middle of those transactions is profitable and knows this is a pump and dump scheme. Rich people are using it for racketeering and tax evasion. The real scheme is the capital gains loss created. That said, it’s still a bubble.
Post modernity artistic merit In a nutshell. They rejected beauty for a reason. They deconstructed it for monetary gain.
Anyone can make an NFT.
Value now seems to be in licenses, brand names, and known artists. Replace and NFT with “sculpture”or “painting” and it’s the same result, same concept applies. That’s why NFTs are the biggest bubbles. The #NFT is new space similar to as we seen with #ICOs in 2017.
The NFT “tax-optimization” Money Laundering Business Model based on “art”.
I have $1000.00
I make drawing of a penis and put it in marketplace for 1000.00
I buy my drawing and sell it in marketplace for 100.00
Anyone interested?
Now you start figuring out “tax-optimization” schemes based on art valuation. Everyone w/ crypto reading this now is running that through their mind, and thinking of friends who are artists to partner with…
Do you think @beeple split that million dollar art into a million pieces and will sell those? It’s called racketeering. People didn’t wait for NFTs to do that. This is common practice in the traditional art market.
1)
Metakovan has $100M in Ether.
Beeple creates NFTs daily.
Metakovan uses $69M to buy Beeple’s NFT.
Beeple returns $69M back to Metakovan who now owns an NFT worth $69M according to price history.
All Beeple and Metakovan’s other Beeple NFTs are now worth millions.
There is no reasonable secondary market liquidity for NFT’s right now- most of the money is made by the marketplaces, the first sellers/authors and knowledgeable insiders.
What they call a good old fashioned double-spend.
Congrats on discovering how legacy art works hint: it works even better and faster with crypto art.
Remember: The IRS Admits It Doesn’t Audit the Rich Because It’s Too Hard
Is the value in a unique transaction chain?
Even if the art is just a pixel image, it might be valuable because the transaction history which could can be considered the value of the piece. The art being traded could even be a function of the transactions, making it an interesting piece.
2)
I have $2M in Ether.
I create an NFT piece.
I use my $2M to buy my own NFT.
I still have my $2M in ETH, and I also have an NFT piece that is worth $2M according to price history.
I sell my NFT to someone for only $200K, or at a 90% discount!
Now I have $2.2M in ETH.
Making millions of profits from an « art piece »
3)
I have $2M in Ether.
I create an erc-20 piece.
I use my $2M to buy my own erc.
I still have my $2M in ETH, and I also have an some erc that is worth $2M according to price history.
I dump my erc for at a 50% discount!
Now I have $3M in ETH.
The good ol Wash….
Of course its all a scam in the real art scene auctions … this is how the traditional art market works.
The quickest way to see the inside of a federal court house, is called money laundering.
The Hot Potato Shuffle – (Christies, Sotheby)
– Teams of investors
2-3 bid up the price of the auction until a sucker comes in on it then dump the auction on the unsuspecting buyer…
Thank god for transaction histories.
A 10% profit and a 90% tax loss created at the same time.
Brilliant…until the IRS sees your deduction and the tweet you sent a year earlier. Banksters use to do this with arts all the time way before NFTS, some famous artists names where built just like that, they’re completely made up out of nothing.
People aren’t stupid, no artist history, no bid history, just out of nowhere “this sold for 2million!” duh!
If the Eth was ill-gotten, by selling your NFT to yourself, you now have $2M minus taxes in legitimate looking ETH. You just got yourself in serious financial trouble.
Once you trade the ETH for the NFT, and spent 25k in gas fees, the capital gains are realized and incurs a tax. The tax isn’t on the purchase of the art, it’s on the difference in the value of the Ethereum between when he got it and when he used it. This is wash trading.
Also it is not a strange phenomenon, it happens in all other markets also. Just more common in crypto because easier to execute.
Wash trading been happening in the space since the beginning and with NFT self promotion with fake bids / purchases happens all the time.
It’s a specific form called painting the tape. But yes both that and wash trading are illegal in many conventional markets. These and other dodgy tactics that have worked in the past elsewhere (and been outlawed) have naturally made their way to crypto due to lack of regulation.
Most will lose their money in NFTs. A wealthy cartel-like group artificially inflate prices. It’s an unregulated blue-chip market that NFTs challenge, like crypto challenging traditional finance.
4.
You sell an NFT to yourself for 10 million.
Use one of these new NFT loan sites.
Get a 5M USDT loan and let them keep the NFT because you know it is worth let just like every other NFT. All that to say, NFTs in 2021 is what ICOs were in 2017. There’s a 99.99% chance that you’re going to lose money buying into them.
That is called front running and it is done by art galleries IRL for decades . You just digitized a scam. Not just art. Companies buy their own products to set standards i.e. QVC
5.
Millionaire: Makes $20M in 2020
Millionaire: Hires “artist” to make “art” for $25K
Artist: Puts one streak on canvas
Millionaire: Thanks artist and has art appraised by an appraiser in his same circle of friends
Appraiser: Values artwork at $20M
Millionaire: Donates $20M artwork to museum to get $20M tax write off
Millionaire: Pays no taxes in 2020
Me at museum: This is stupid, it’s just a line on a canvas
Hipster next to me: No, you just don’t understand it because you’re uncultured.
6.
I have $2M in USD.
I draw a circle and call it an art piece.
I lend $2M to a friend who registers as an art dealer and buys my art piece.
I buy it back against the loan.
I still have my $2M in USD, paid my 0.2M to gas fees while doing it, and I also have an art piece worth $2M according to price history.
8.
I have 2m in eth.
I create a nft.
I buy the nft for 2m.
I sell the nft to myself for 200k. Oops.
Balance is the TX costs, with the profit made in crypto, on my tax return.
Wash, rinse, repeat.
It’s about power. Those with the power control the money. The life blood of this country is money and the same people that have it, (money) have
been controlling every aspect of our “commoner” lives since we belonged to England.
The Failure and Treason of the Senate
The Art of the Steal
This is an excellent movie if you’re passionate about art and highly skeptical about the art establishment. First of all, everyone who loves great nineteenth century French art should know about the Barnes and the remarkable collection Dr. Barnes amassed when most major art museums — especially in Philadelphia — were turning up their nose at the same art.
The Barnes cannot be “recreated,” as the schemers behind the move claim. No matter how beautiful and prestigious a new container for the paintings might be, a Barnes Foundation in Philadelphia will never be the work of art that Albert Barnes created, but instead the work of cultural vandalism that the Pew, Lenfest and Annenberg Foundations created, with Pennsylvania Gov. Ed Rendell.
“The Art of the Steal” that it included 181 Renoirs, 69 Cezannes, 59 Matisses, 46 Picassos, 16 Modiglianis and seven van Goghs. Barnes collected these works during many trips to Paris at a time when establishment museums, such as the Philadelphia Museum of Art, considered these artists beneath them.
The Art of the Steal is a 2009 documentary film directed by Don Argott, about the controversial move of the Barnes Foundation, generally considered to be the world’s best collection of post-Impressionist art and valued in 2009 to be worth at least $25-billion, from Merion, Pennsylvania to Philadelphia.
The Art of the Steal: Betraying Dr. Albert Barnes and Future Generations
Celebrated among aesthetes, the Barnes Foundation comprises a private collection groaning with manifold treasures among which are found African sculptures, Asian prints and Native American ceramics.
The opposition group, Friends of the Barnes Foundation, says The Art of the Steal revealed that Ott did not have all the evidence in 2006, when he approved the art collection’s move.