5 ms·

So they mention money laundering. Serious question: does that explain at least some of the hype surrounding NFTs?

by Isamu 5y ago

rafale 5y ago
In the NFT/crypto world, you will see more liquidity mining in the form of wash trades in the hope of amassing a bigger share of a future platform airdrop (e.g. the much awaited but so far not happening OpenSea airdrop)
vmception 5y ago
Nobody in the art space has a worse experience when using NFTs (except maybe in transaction fees on some networks). It is either the exact same experience or a better one. So, "yesn't"? It would improve the same aspects of the fine art world if thats what some market participants like art pieces for. You can move more money faster with crypto so if you want to rationalize those movements with NFT purchases - or just attract the people who want to do that but found crypto unrelateable before NFTs - then thats available too. A lot of these questions evaporate when you use them yourself. Its fun to imagine everything is a wash trade, but when a bot or person bids on your own NFTs and you use that money to pay rent or buy a car, you personally will then understand that the assumption is simply irrelevant. Its like "yeah, sure the NFT space is ripe for money laundering and wash trading, there are also other people buying and selling, the distinction doesn't matter" Even if the bots are money laundering, hoping to resell art they buy to someone else, are they successfully money laundering? We don't know and its not our problem, so who cares? People worried that the bids will dry up on artwork they own if they attempted to enter the space for investment? Who cares! Thats a risk for everyone in any asset class. Take the risk or don't.
- Doxin 5y ago
  > Nobody in the art space has a worse experience when using NFTs What about all the digital artists getting their art stolen and sold as NFTs? NFTs are hardly a solution to anything, let alone a better solution. There's a disconnect between NFTs and the real world that many of the proponents fail to address.
  - pibechorro 5y ago
    I believe NFTS are a giant bubble right now. But to say they are hardly a solution for anything is equally extreme. They do offer solutions, and art authentication and chain of custody is one. Real art, not some copy paste stolen gifs as you mention. Same applies to tracking of parts and components in manufacturing, etc.
  - vmception 5y ago
    Art plagiarism has nothing to do with NFTs, in fact this whole article is about it. The digital artist you are referring to is not using NFTs so they have no experience, it doesnt refute the point. The market is saying they should. They can ignore the market its a choice. The plagiarism is done faster? Shrug
  - jhgb 5y ago
    > What about all the digital artists getting their art stolen and sold as NFTs? Surely you're joking. Not only can't you steal a bunch of digits; even more importantly, you can't sell them "as an NFT" since what's getting sold is not the thing the NFT is a hash of. At least to my knowledge, there's never been any property rights implications of an NFT transaction in any country.
cryptoanon 5y ago
NFTs are hypothetically a good way to launder money but practically not so. Governments and chain analytics companies their tentacles wrapped around blockchains insofar that, if trying to launder money in size, you'll likely be discovered.
- vmception 5y ago
  Right! The real question is why does the recipient want to launder or obfuscate the origin of proceeds. Criminal money laundering charge requires an illicit origin, while there are plenty of non-illicit origins that would prompt someone to want to obfuscate it. Those people can do that successfully. But for the criminals its not clear if they are successful. Regardless, I think better information is useful too. You can always use your clean savings and salaried earnings and buy some random small cap crypto, and then use your dirty money to pump that crypto, and sell your clean savings at a profit and just book the capital gains. This is likely happening a whole lot by now. The dirty money just is held in Tornado.cash and then exits Tornado.cash to a virgin address which acts as any random trader in the new crypto being pumped. People do this in the stock market too, they just have to go the extra step of making brokerage accounts with someone else's ID. I've also read about people that never cash out and just keep operating as the stolen identity, while the banks and governments believe there is no illicit money in the capital markets (yeah because it all passed KYC!). It's not like you would know if someone had made another bank or brokerage account in your name. But at least with crypto coin pump laundering nobody has the risk of getting framed.

So they mention money laundering. Serious question: does that explain at least some of the hype surrounding NFTs?

by Isamu 5y ago

So they mention money laundering. Serious question: does that explain at least some of the hype surrounding NFTs?

In the NFT/crypto world, you will see more liquidity mining in the form of wash trades in the hope of amassing a bigger share of a future platform airdrop (e.g. the much awaited but so far not happening OpenSea airdrop)

vmception 5y ago

Nobody in the art space has a worse experience when using NFTs (except maybe in transaction fees on some networks). It is either the exact same experience or a better one. So, "yesn't"? It would improve the same aspects of the fine art world if thats what some market participants like art pieces for. You can move more money faster with crypto so if you want to rationalize those movements with NFT purchases - or just attract the people who want to do that but found crypto unrelateable before NFTs - then thats available too. A lot of these questions evaporate when you use them yourself. Its fun to imagine everything is a wash trade, but when a bot or person bids on your own NFTs and you use that money to pay rent or buy a car, you personally will then understand that the assumption is simply irrelevant. Its like "yeah, sure the NFT space is ripe for money laundering and wash trading, there are also other people buying and selling, the distinction doesn't matter" Even if the bots are money laundering, hoping to resell art they buy to someone else, are they successfully money laundering? We don't know and its not our problem, so who cares? People worried that the bids will dry up on artwork they own if they attempted to enter the space for investment? Who cares! Thats a risk for everyone in any asset class. Take the risk or don't.

Doxin 5y ago
> Nobody in the art space has a worse experience when using NFTs What about all the digital artists getting their art stolen and sold as NFTs? NFTs are hardly a solution to anything, let alone a better solution. There's a disconnect between NFTs and the real world that many of the proponents fail to address.
- pibechorro 5y ago
  I believe NFTS are a giant bubble right now. But to say they are hardly a solution for anything is equally extreme. They do offer solutions, and art authentication and chain of custody is one. Real art, not some copy paste stolen gifs as you mention. Same applies to tracking of parts and components in manufacturing, etc.
- vmception 5y ago
  Art plagiarism has nothing to do with NFTs, in fact this whole article is about it. The digital artist you are referring to is not using NFTs so they have no experience, it doesnt refute the point. The market is saying they should. They can ignore the market its a choice. The plagiarism is done faster? Shrug
- jhgb 5y ago
  > What about all the digital artists getting their art stolen and sold as NFTs? Surely you're joking. Not only can't you steal a bunch of digits; even more importantly, you can't sell them "as an NFT" since what's getting sold is not the thing the NFT is a hash of. At least to my knowledge, there's never been any property rights implications of an NFT transaction in any country.

cryptoanon 5y ago

NFTs are hypothetically a good way to launder money but practically not so. Governments and chain analytics companies their tentacles wrapped around blockchains insofar that, if trying to launder money in size, you'll likely be discovered.

vmception 5y ago
Right! The real question is why does the recipient want to launder or obfuscate the origin of proceeds. Criminal money laundering charge requires an illicit origin, while there are plenty of non-illicit origins that would prompt someone to want to obfuscate it. Those people can do that successfully. But for the criminals its not clear if they are successful. Regardless, I think better information is useful too. You can always use your clean savings and salaried earnings and buy some random small cap crypto, and then use your dirty money to pump that crypto, and sell your clean savings at a profit and just book the capital gains. This is likely happening a whole lot by now. The dirty money just is held in Tornado.cash and then exits Tornado.cash to a virgin address which acts as any random trader in the new crypto being pumped. People do this in the stock market too, they just have to go the extra step of making brokerage accounts with someone else's ID. I've also read about people that never cash out and just keep operating as the stolen identity, while the banks and governments believe there is no illicit money in the capital markets (yeah because it all passed KYC!). It's not like you would know if someone had made another bank or brokerage account in your name. But at least with crypto coin pump laundering nobody has the risk of getting framed.