An artist from Latvia is under investigation for allegedly selling over 3,500 NFTs, or non-fungible tokens, to launder money.
He may get up to 12 years in prison. The authorities have blocked his bank accounts and launched an investigation without even notifying him.
Artist Who Sold Over 3,500 NFTs Prosecuted for Money Laundering in Latvia
Latvian artist and developer Ilya Borisov is awaiting trial amid accusations he used digital collectibles to launder €8.7 million ($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 ‘Art ― Crime’ title, which reveals how the Latvian government froze his accounts without any formal notice. A criminal case was initiated against the artist in February, but he only found out about it in May.
According to the site, the Latvian sold 3,557 NFTs to earn the amount in question. Quoted by the crypto news outlet Bits.media, Borisov insisted he did not try to avoid taxation and even asked the revenue service for clarification on the matter. In 2021 alone, he paid around €2.2 million in income tax.
However, Borisov is now prosecuted for large-scale money laundering and may potentially receive up to 12 years in prison. He says the allegations have deeply affected him morally. The artist, a Russian by origin, also fears that Moscow’s military invasion of Ukraine might influence the judges’ decision in his case.
Ilya Borisov emphasized that blockchain technologies create a lot of opportunities for artists like himself and accused regulators of limiting these opportunities to a great extent.
Non-Fungible Tokens Enjoy Popularity Amid Attempts to Regulate The Market
Over the past few years, NFTs have become a popular tool to prove ownership of digital records and assets, especially works of art, music, and video. The global market for non-fungible tokens has been estimated at between $20 billion and $35 billion. Expectations are it will grow even further with one forecast suggesting it may 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 collect more than $100,000. Cryptopunks is an NFT collection on the Ethereum blockchain which was launched in 2017.
Authorities around the world have been trying to regulate NFTs alongside cryptocurrencies. The latest draft of the EU’s Markets in Crypto Assets (MiCA) proposal excludes NFTs but European officials should decide whether separate regulations are needed for them within 18 months.
In Russia, a bill on NFTs was filed with the lower house of parliament in May. And in China, where the term ‘digital collectibles’ is preferred to avoid association with cryptos, NFTs have enjoyed growing popularity, but restrictions on secondary trading have reportedly convinced tech giants like Tencent to pull out of that market.