A Latvian artist is being investigated for allegedly selling NFTs, or non-fungible tokens, to launder money, for which he faces up to 12 years in prison. The authorities blocked his bank accounts and launched an investigation without even warning him.
Artist who sold over 3,500 NFTs sued for money laundering in Latvia
Latvian artist and developer Ilya Borisov awaits trial amid accusations he used digital collectibles to launder 8.7 million euros ($8.8 million), as investigators claim to have established. He denies any wrongdoing and is determined to seek justice in court.
Borisov launched a website under the title “Art ― Crime”, which reveals how the Latvian government froze his accounts without any formal notice. A criminal case was opened against the artist in February, but he only learned about it in May.
According to the site, the Latvian sold 3,557 NFTs to earn the sum in question. Quoted by Bits.media, Borisov insisted that he had not tried to avoid taxes and even asked the tax department for clarification on the matter. In 2021 alone, he paid around 2.2 million euros in income tax.
However, Borisov is now being prosecuted for large-scale money laundering and potentially faces up to 12 years in prison. He says the allegations have deeply affected him morally. The artist, of Russian origin, also fears that the military invasion of Ukraine by Moscow will influence the decision of the judges in his case.
Ilya Borisov pointed out that blockchain technologies create many opportunities for artists like him and accused regulators of limiting these opportunities to a large extent.
Non-Fungible Tokens Enjoy Popularity Among Attempts to Regulate the Market
In recent years, NFTs have become a popular tool for proving ownership of records and digital assets, especially works of art, music and video. The global market for non-fungible tokens has been estimated between $20 billion and $35 billion. It is expected to rise even further, with one forecast suggesting it could reach $80 billion by 2025.
Digital collectibles have been used to raise funds for various causes. Earlier this year, Ukraine sold a Cryptopunk NFT, donated to support the war-torn country, to raise over $100,000. Cryptopunks is an NFT collection on the Ethereum blockchain that was launched in 2017.
Authorities around the world have attempted to regulate NFTs alongside cryptocurrencies. The EU’s latest draft proposal on Crypto Asset Markets (MiCA) excludes NFTs, but EU officials are expected to decide whether separate regulations are needed for them within 18 months.
In Russia, an NFT bill was tabled in the lower house of parliament in May. And in China, where the term “digital collectibles” is preferred to avoid any association with cryptos, NFTs have grown in popularity, but restrictions on secondary trading have reportedly convinced tech giants like Tencent to pull out. of this market.
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