Are NFTs used for money laundering? Yes they are, says Mr Whale

The non-fungible symbolic space has seen a hive of activity over the past month or so, but more could happen than meets the eye as concer...

The non-fungible symbolic space has seen a hive of activity over the past month or so, but more could happen than meets the eye as concerns emerge over the industry’s involvement in money laundering. money and tax evasion.

Ultra-bearish crypto investor and crypto commentator Mr. Whale has drawn attention to the darker side of the burgeoning NFT space. In one blog post earlier this week, the early adopter of Bitcoin attributed the popularity and notoriety of NFTs to their ability to facilitate money laundering and tax evasion for the rich.

“Behind the facade of a bunch of bored rich wealthy who buy incredibly high prices for digital art is a sinister and twisted money laundering scheme for the ultra-rich crypto elites to make their money. illegal legal profits. “

He argues that because art is so subjective and in the eyes of the beholder, NFTs often go unchecked by lawmakers and regulators. This aspect of art is one of the main reasons it has been used as a vehicle for illicit financial flows for centuries, he added.

The actual aspect of money laundering is fairly straightforward, according to Mr. Whale. Buying an NFT on your own using illicit funds is an easy way to transfer money while pretending the funds were used for a legitimate art purchase and avoiding taxes in the process. . An example was demonstrated by former USA Today reporter Isaiah McCall on his blog earlier this year where he explained the process:

“If you have $ 1 million in illegal money, you’ll spend $ 1 million on your own NFT. You can do this yourself or use a trusted third-party account. Then you resell the garbage for nothing and collect the profits. “

Cat Graffam, an assistant faculty member in the Art & Design department at Lasell University, Massachusetts, told Mr Whale that NFTs are already being used for money laundering in the same way as physical art. She added that they offer certain advantages, elaborating:

“It might be even easier to move dirty funds as they are tied to a decentralized currency and the fact that there are no artwork to transport or store in warehouses in offshore tax havens. “

Related: Smart User Makes $ 80,000 Profit in CryptoPunk “Smash and Grab”

For these reasons, the NFT scene is likely to attract the attention of regulators and tax authorities depending on both. Mr Whale said there was no doubt that governments would eventually crack down on this trend, adding that “although there are a number of NFT exchanges without KYC / AML regulation, this will certainly change in the future” .

As Cointelegraph reported earlier this year, investors who use profits from their crypto holdings to buy NFTs probably still have to pay capital gains tax when filing their taxes in the USA.

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Newsrust - US Top News: Are NFTs used for money laundering? Yes they are, says Mr Whale
Are NFTs used for money laundering? Yes they are, says Mr Whale
Newsrust - US Top News
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