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The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then

The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering Now of course there's a mountain of clueless suckers kicking off a regular tulip mania-style bubble. I wonder how many more weeks it will last.

arcticbull 5y ago
Like this $500,000,000 flash loan backed wash trade of punk 9998. [1] [1] https://news.artnet.com/art-world/crypto-punk-500-million-sale-2028470 https://news.artnet.com/art-world/crypto-punk-500-million-sa...
- throaway6942 5y ago
  that's not a wash trade.. it was just a publicity stunt. I know the guy who did it!
  - pama 5y ago
    I suspect that the guy who did it now owes the IRS a large commission in the form of taxes.
    - vmception 5y ago
      The tax remindooooooor haha that’s a meme in crypto space about being that guy
      - arcticbull 5y ago
        So to be clear the community is encouraging criminality and attempting to brow-beat folks suggesting compliance with the law into accepting said criminality? Sounds healthy, and definitely not like a cult. It’s not a good look to be on the receiving end of government benefits and services, gloating about your lack of contribution and encouraging others not to. This may look good in crypto circles but here in the real world it makes you look pretty bad, not gonna lie. I've always wondered how those Bond villains accrued an army of employees on their remote militarized outposts helping them do crime, though I'm beginning to suspect they just slippery-sloped their way into it.
        vmception 5y ago
        So to be clear, no, that's not what the meme is about. Is your essay from GPT-3? It's about not offering anything to a discussion as they also don't even know about what tax is relevant. This person follows that rubric exactly, as they "suspect" a tax is involved, when a flash loan wash sale would just as easily not cause any tax at all and they offer no introspection into the nature of the transaction and what questions remain about how it conforms with the tax code. A person borrows money to pretend to transfer an asset to themselves and returns the money. Neither borrowing money or moving the asset to your other account are tax events. The tax remindoooooooor comes to the discussion way after the party, clueless, and says something clueless. Its predictable, its meme worthy. Pretty much everyone in crypto runs into people like them so the memes are made.
        arcticbull 5y ago
        I mean one could begin by looking at when taxes are due at the transaction of an art piece, and ask an attorney, instead of just assuming no taxes are due and wandering off could one not? The burden is on them. And then when someone suggests doing the bare minimum due diligence on a half billion dollar transaction replying "the tax remindooooooor." You can see why pretending no taxes are due because "blonkchain" and making fun of someone who suggests that doing some due diligence on a half billion dollar transaction isn't a good look, can't you? Do you really think it's unreasonable to assume a half billion dollar capital gain isn't a taxable event? > "... when a flash loan wash sale would just as easily not cause any tax at all" What's your basis for this guess? Is it because a tax wouldn't be due on the sale of stock you repurchased within 30 days? That's called the wash-sale rule and it only applies to securities. It doesn't even apply to commodities or futures - or crypto. So either it's a security, in which case this is a federal crime, or it's not a security, and the wash trader has to pay taxes on the first transaction - and a hypothetical second transaction would have to be made to generate a loss to cover. Y'all need to get over yourselves, the toxic community is easily the worst thing about crypto - and that's after figuring in the ruining the world with your emissions so you can gamble bit.
        vmception 5y ago
  - arcticbull 5y ago
    > Wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market. In some situations, wash trades are executed by a trader and a broker who are colluding with each other, and other times wash trades are executed by investors acting as both the buyer and the seller of the security. Wash trading is illegal under U.S. law, and the IRS bars taxpayers from deducting losses that result from wash trades from their taxable income. [1] Whew, good thing it's not a security, otherwise it would 100% absolutely be a half billion dollar illegal wash trade, and that kind of stuff comes with time in the big house. IANAL, but stunts, amirite? [1] https://www.investopedia.com/terms/w/washtrading.asp https://www.investopedia.com/terms/w/washtrading.asp
    - throaway6942 5y ago
      We can't apply 1:1 laws to crypto precisely because of this. I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. In fact, you can very easily check it on etherscan or similar tools that this was a flash loan.
      - deleted 5y ago
        [deleted]
      - arcticbull 5y ago
        > We can't apply 1:1 laws to crypto precisely because of this. I think in a lot of cases that's simply wishful thinking. They Howey test is actually a very good fit in the crypto space broadly, especially alongside the guidance from the SEC on how to interpret it with respect to digital assets. [1] Most tokens are just straight-up securities, what we're lacking isn't regulation but enforcement. NFTs are likely not securities as they fail the Howey test. [2] Fractionalized NFTs, however, probably are securities. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. It's still wash trading, of course, it may not be a crime because it's not done against a security as I mentioned. IMO it could be some other kind of fraud or civil matter already as you're enticing a purchase on the basis of intentionally misrepresenting past trades. If not, I agree, this might be a good area for some additional regulation, either here or in markets broadly (I'm looking at you, art and collectibles). [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf [2] https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkins-discusses-whether-nfts-are-securities/ https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkin...
Bombthecat 5y ago
Or: kids who started early with crypto with no idea of wealth and worth of a coin. When you habe thousands of coins. Giving out one isnt that expensive..
- Ekaros 5y ago
  I think for some of them it is just next step in the crypto investment/gambling. The current hotness in making money by flipping tokens after ICOs... With all of the usual FOMO and so on...
nuerow 5y ago
> The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering I'm not sure if the link between NFTs and money laundering can be downplayed as conspiracy theory. Even yesterday Reuters published a newspiece on NFTs being auctioned by the likes of Sotheby's, and where crypto-rich buyers pay NFT auctions with crypto, where a cryptocurrency lawyer was quoted as pointing out money laundering via cryptocurrencies was a "known fact." https://www.reuters.com/business/finance/new-masters-how-auction-houses-are-chasing-crypto-millions-2021-11-08/ https://www.reuters.com/business/finance/new-masters-how-auc... Using NFT transactions to launder money isn't exactly a novel idea as the art world is dominated and driven by money laundering schemes. In fact, in Mexico the art market tanked 70% once the Mexican government passed legislation requiring more info from buyers, because it's believed Mexican cartel rings were behind these transactions. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...
- soco 5y ago
  Well regular art sales are currently considered as potential wash sales, so why would be something even more cryptic (haha) considered even less.
  - vmception 5y ago
    The people that make separate higher standards for crypto are ignorant about how the thing they respect works too.
    - nuerow 5y ago
      > The people that make separate higher standards for crypto are ignorant about how the thing they respect works too. Not really, it's actually the other way around. Whataboutism aside, crypto proponents somehow try to maintain a cognitive dissonance of how crypto is designed to be unregulated and out of government's reach and at the same time show a kneejerk reaction to any comment on how crypto is used to perform transactions not allowed by regulation controlled by governments such as securities fraud and money laundering.
deleted 5y ago
[deleted]
greenhatman 5y ago
I'd be money on this actually being the case. This whole NFT craze is pure insanity.
iszomer 5y ago
And the kicker is, the record of your "wash trades" is now stored on an immutable blockchain, a stark contrast to actual paper trails.

arcticbull 5y ago

Like this $500,000,000 flash loan backed wash trade of punk 9998. [1] [1] https://news.artnet.com/art-world/crypto-punk-500-million-sale-2028470 https://news.artnet.com/art-world/crypto-punk-500-million-sa...

throaway6942 5y ago
that's not a wash trade.. it was just a publicity stunt. I know the guy who did it!
- pama 5y ago
  I suspect that the guy who did it now owes the IRS a large commission in the form of taxes.
  - vmception 5y ago
    The tax remindooooooor haha that’s a meme in crypto space about being that guy
    - arcticbull 5y ago
      So to be clear the community is encouraging criminality and attempting to brow-beat folks suggesting compliance with the law into accepting said criminality? Sounds healthy, and definitely not like a cult. It’s not a good look to be on the receiving end of government benefits and services, gloating about your lack of contribution and encouraging others not to. This may look good in crypto circles but here in the real world it makes you look pretty bad, not gonna lie. I've always wondered how those Bond villains accrued an army of employees on their remote militarized outposts helping them do crime, though I'm beginning to suspect they just slippery-sloped their way into it.
      - vmception 5y ago
        So to be clear, no, that's not what the meme is about. Is your essay from GPT-3? It's about not offering anything to a discussion as they also don't even know about what tax is relevant. This person follows that rubric exactly, as they "suspect" a tax is involved, when a flash loan wash sale would just as easily not cause any tax at all and they offer no introspection into the nature of the transaction and what questions remain about how it conforms with the tax code. A person borrows money to pretend to transfer an asset to themselves and returns the money. Neither borrowing money or moving the asset to your other account are tax events. The tax remindoooooooor comes to the discussion way after the party, clueless, and says something clueless. Its predictable, its meme worthy. Pretty much everyone in crypto runs into people like them so the memes are made.
        arcticbull 5y ago
        I mean one could begin by looking at when taxes are due at the transaction of an art piece, and ask an attorney, instead of just assuming no taxes are due and wandering off could one not? The burden is on them. And then when someone suggests doing the bare minimum due diligence on a half billion dollar transaction replying "the tax remindooooooor." You can see why pretending no taxes are due because "blonkchain" and making fun of someone who suggests that doing some due diligence on a half billion dollar transaction isn't a good look, can't you? Do you really think it's unreasonable to assume a half billion dollar capital gain isn't a taxable event? > "... when a flash loan wash sale would just as easily not cause any tax at all" What's your basis for this guess? Is it because a tax wouldn't be due on the sale of stock you repurchased within 30 days? That's called the wash-sale rule and it only applies to securities. It doesn't even apply to commodities or futures - or crypto. So either it's a security, in which case this is a federal crime, or it's not a security, and the wash trader has to pay taxes on the first transaction - and a hypothetical second transaction would have to be made to generate a loss to cover. Y'all need to get over yourselves, the toxic community is easily the worst thing about crypto - and that's after figuring in the ruining the world with your emissions so you can gamble bit.
        vmception 5y ago
- arcticbull 5y ago
  > Wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market. In some situations, wash trades are executed by a trader and a broker who are colluding with each other, and other times wash trades are executed by investors acting as both the buyer and the seller of the security. Wash trading is illegal under U.S. law, and the IRS bars taxpayers from deducting losses that result from wash trades from their taxable income. [1] Whew, good thing it's not a security, otherwise it would 100% absolutely be a half billion dollar illegal wash trade, and that kind of stuff comes with time in the big house. IANAL, but stunts, amirite? [1] https://www.investopedia.com/terms/w/washtrading.asp https://www.investopedia.com/terms/w/washtrading.asp
  - throaway6942 5y ago
    We can't apply 1:1 laws to crypto precisely because of this. I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. In fact, you can very easily check it on etherscan or similar tools that this was a flash loan.
    - deleted 5y ago
      [deleted]
    - arcticbull 5y ago
      > We can't apply 1:1 laws to crypto precisely because of this. I think in a lot of cases that's simply wishful thinking. They Howey test is actually a very good fit in the crypto space broadly, especially alongside the guidance from the SEC on how to interpret it with respect to digital assets. [1] Most tokens are just straight-up securities, what we're lacking isn't regulation but enforcement. NFTs are likely not securities as they fail the Howey test. [2] Fractionalized NFTs, however, probably are securities. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. It's still wash trading, of course, it may not be a crime because it's not done against a security as I mentioned. IMO it could be some other kind of fraud or civil matter already as you're enticing a purchase on the basis of intentionally misrepresenting past trades. If not, I agree, this might be a good area for some additional regulation, either here or in markets broadly (I'm looking at you, art and collectibles). [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf [2] https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkins-discusses-whether-nfts-are-securities/ https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkin...

Bombthecat 5y ago

Or: kids who started early with crypto with no idea of wealth and worth of a coin. When you habe thousands of coins. Giving out one isnt that expensive..

Ekaros 5y ago
I think for some of them it is just next step in the crypto investment/gambling. The current hotness in making money by flipping tokens after ICOs... With all of the usual FOMO and so on...

nuerow 5y ago

> The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering I'm not sure if the link between NFTs and money laundering can be downplayed as conspiracy theory. Even yesterday Reuters published a newspiece on NFTs being auctioned by the likes of Sotheby's, and where crypto-rich buyers pay NFT auctions with crypto, where a cryptocurrency lawyer was quoted as pointing out money laundering via cryptocurrencies was a "known fact." https://www.reuters.com/business/finance/new-masters-how-auction-houses-are-chasing-crypto-millions-2021-11-08/ https://www.reuters.com/business/finance/new-masters-how-auc... Using NFT transactions to launder money isn't exactly a novel idea as the art world is dominated and driven by money laundering schemes. In fact, in Mexico the art market tanked 70% once the Mexican government passed legislation requiring more info from buyers, because it's believed Mexican cartel rings were behind these transactions. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...

soco 5y ago
Well regular art sales are currently considered as potential wash sales, so why would be something even more cryptic (haha) considered even less.
- vmception 5y ago
  The people that make separate higher standards for crypto are ignorant about how the thing they respect works too.
  - nuerow 5y ago
    > The people that make separate higher standards for crypto are ignorant about how the thing they respect works too. Not really, it's actually the other way around. Whataboutism aside, crypto proponents somehow try to maintain a cognitive dissonance of how crypto is designed to be unregulated and out of government's reach and at the same time show a kneejerk reaction to any comment on how crypto is used to perform transactions not allowed by regulation controlled by governments such as securities fraud and money laundering.

deleted 5y ago

[deleted]

greenhatman 5y ago

I'd be money on this actually being the case. This whole NFT craze is pure insanity.

iszomer 5y ago

And the kicker is, the record of your "wash trades" is now stored on an immutable blockchain, a stark contrast to actual paper trails.