4 ms·

I'm not sure I can follow. The "legit" transaction (NFT<->Money) would be declared and taxes would be paid on any gains. The "real" product would be delivered

I'm not sure I can follow. The "legit" transaction (NFT<->Money) would be declared and taxes would be paid on any gains. The "real" product would be delivered off chain and without anybody knowing. From an outsiders perspective it looks like a high value art purchase.

capableweb 5y ago
The purchaser can just claim they spent X on art, sure, declare away. But how do you recover the funds again? You'll need to declare that you sold art for X, and tax it so you can actually use it. Again, nothing has been washed here, you've just made a normal transfer with zero benefit.
- arlcode 5y ago
  Oh I see. I think there are several use cases people associate with NFT. One is money laundering and that is indeed hard as you mention. The other is payment for illegal services and goods. I can't wire you money for "one assassination" but I can wire you money for "art" because who knows how much it's really worth.
- boomlinde 5y ago
  > But how do you recover the funds again? You'll need to declare that you sold art for X, and tax it so you can actually use it. Yes, in every respect you treat it as legitimate trade, when in fact it's payment for something illegal, in order to conceal that it isn't payment for a legal service or good. That's a basically a dictionary definition of money laundering. I'm not sure what you expect of it here, or why paying taxes matters. The point is not to evade taxation, but to conceal the illegal transaction and make it appear as though it's legitimate and legal. > Again, nothing has been washed here, you've just made a normal transfer with zero benefit. Something has been washed in the sense that you've intentionally created a plausibly legitimate cover for the transaction in order to conceal the illegal goods/services the payment actually concerns.

4 ms·

I'm not sure I can follow. The "legit" transaction (NFT<->Money) would be declared and taxes would be paid on any gains. The "real" product would be delivered

by arlcode 5y ago

capableweb 5y ago
The purchaser can just claim they spent X on art, sure, declare away. But how do you recover the funds again? You'll need to declare that you sold art for X, and tax it so you can actually use it. Again, nothing has been washed here, you've just made a normal transfer with zero benefit.
- arlcode 5y ago
  Oh I see. I think there are several use cases people associate with NFT. One is money laundering and that is indeed hard as you mention. The other is payment for illegal services and goods. I can't wire you money for "one assassination" but I can wire you money for "art" because who knows how much it's really worth.
- boomlinde 5y ago
  > But how do you recover the funds again? You'll need to declare that you sold art for X, and tax it so you can actually use it. Yes, in every respect you treat it as legitimate trade, when in fact it's payment for something illegal, in order to conceal that it isn't payment for a legal service or good. That's a basically a dictionary definition of money laundering. I'm not sure what you expect of it here, or why paying taxes matters. The point is not to evade taxation, but to conceal the illegal transaction and make it appear as though it's legitimate and legal. > Again, nothing has been washed here, you've just made a normal transfer with zero benefit. Something has been washed in the sense that you've intentionally created a plausibly legitimate cover for the transaction in order to conceal the illegal goods/services the payment actually concerns.