NFTs over 10k, you go to jail
twitter.com>Soon the only way a person born in the USA will be able to do anything in any scale with these technologies, without KYCing everyone or becoming a felon, will be to a) leave and b) operate with a non-US entity and ideally non-US employees/directors.
Ah, the wishful thinking of cryptobros that only America will KYC. Europe says hi.
Good, honestly. This NFT stuff is such garbage.
I have the same thoughts. Though after seeing The Matrix recently and the recent news about Facebook's Meta (or Meta's Facebook?), I begin to see what these NFTs will be used for. Simulacra and Simulation. I don't think a rational mind could ever justify them from an efficiency standpoint. Just like any rational mind couldn't justify a glorified linked-list. But we're not rational creatures.
Why are artists incentivised to makw them? Don't they only make money off the initial sale?
What happens after that, they don't make money off, correct?
Typically artists receive royalties on each re-sale of their tokens (one of the benefits of this space compared to traditional art markets).
> Don't they only make money off the initial sale?
In some cases there may be a royalty to the original artist on resale. But even if there isn't, just as with dividend-free stock offerings, the existence of a resale market means that the artist (or company) can expect to receive more money from the initial sale since buyers have the prospect of recuperating some of their initial expense by reselling the NFTs (or shares) later.
> Why are artists incentivised to makw them?
NFTs have absolutely nothing to do with artists or art. They are mainly a scheme to launder money.
Please note that the poster whining about the IRS provision didn't complained about sales tax or income tax, but the need to report transactions over 10k to the IRS. The IRS moved in to plug a loophole, and the NFT gang reacted to it like vampires exposed to sunlight.
> NFTs have absolutely nothing to do with artists or art.
That's an incredibly ignorant remark.
Art has been one of the more prominent uses of NFTs that emerged this year. Despite the relative immaturity of the technology, it has already proven transformative for many artists and non-profit art organizations.
For example, see Hicetnunc.xyz. Further reading:
[1] - https://www.plummerfernandez.com/works/not-another-jpeg/
[2] - https://jackrusher.com/journal/what-does-it-mean-to-buy-a-gi...
> That's an incredibly ignorant remark.
Right, that must be why this is a discussion on the IRS requiring people to report transactions to tackle money laundering, and how that justifies protests, and not art history.
> Art has been one of the more prominent uses of NFTs that emerged this year.
"Art" has been the pretext. The prominent use of NFTs is to perform transactions.
Don't be disingenuous, and tone down the arrogant gaslighting.
Not sure how this is gaslighting, arrogant, or disingenuous.
You may not agree with this use of the technology, but it does not mean the behaviour is primarily criminal. It can be likened to a traditional art market, where artists attempt to earn revenue for their work by distributing and selling limited signed editions, but in this case the signature is cryptographically verified.
> You may not agree with this use of the technology, but it does not mean the behaviour is primarily criminal.
Again, don't be disingenuous. You're literally commenting on a post on how the IRS requires transactions over 10k to be reported with the goal of fighting money laundering, and how that raises "alarm bells". This is not about paying artists. This is not about paying taxes. This is about a requirement to report potentially illegal transactions within the scope of money laundering.
Trying to spin this to be about art and artists is profoundly disingenuous, and launching ad hominem attacks on those who point out this fact just shows how weak are your arguments.
I'm literally commenting on a post that states:
> NFTs have absolutely nothing to do with artists or art.
Suggesting that such a remark is ignorant—i.e. lacking knowledge—is not ad hominem. The arguments in favour of this usage of the technology are quite well laid out in the articles I linked, should you choose to read them.
I've only ever seen artists make and sell their art as NFTs. Which is why I asked. Because I'm confused as to why an artist would do that.
I understand it's a massive scam but I didn't get why prominent artists I follow are getting into it in the first place.
The original artist doesn’t get any money if a physical version gets resold either.
NFTs could theoretically actually allow artists to get a cut of any future sales because of its basis in smart contracts.
Of course, NFTs can be used for money laundering as well but art is presumably already used for that purpose.
> Of course, NFTs can be used for money laundering as well but art is presumably already used for that purpose.
Modern art is primarily driven for the purpose of money laundering.
https://edition.cnn.com/2020/07/29/business/art-money-launde...
NFTs are just a new way to conduct the same money laundering schemes which, loopholes and the lack of regulation, are easier to hide and exploit.
This recent change adopted by the IRS is just a way to address that loophole, and lo and behold it's spun as a deadly attack on the purposefulness of the entire technology.
> I didn't get why prominent artists I follow are getting into it in the first place.
Power law. Prominent artists will move to cash in now, as they can hoover up 90% of whatever legitimate business there is. The remaining 10% will be fought over by no-name artists who enter the scene too late.
> I understand it's a massive scam but I didn't get why prominent artists I follow are getting into it in the first place.
Even highly respected artists are not immune to the appeal of making an easy buck. For instance, as legend would have it, Pablo Picasso created his "Poor Robbie" engraving with the express purpose of monetizing it, so that his close friend Robert Godet could quite literally use his printing press to whip out yet another "limited edition" print whenever he was short on cash and needed a quick buck.
I believe a more appropriate title would be "facilitate money laundering, you go to jail"
I guess you have less than 1 day now then?
I did a quick Google search to see who the tweeter is and found this gem[1]:
> BC: Will the Bond token be available to U.S. and U.K. users soon?
> PD: U.K. is more likely than the U.S., possibly in Q1 we’ll make a deal with the owners of a regulated vehicle. However, the strict laws in the U.K. against bearer securities add further complications.
> The structure is actually U.S.-centric, each set of assets is held in a Wyoming LLC that I manage through a Wyoming corporation, and my British colleagues have created an Armenian company that is a customer of that basic wealth management service. US property law backs the LLC membership’s strict rules towards benefiting investors, and the token is backed by a contract between the Armenian company (which owns LLC membership, and thus pass-through ownership of the assets) and the holder. Other people can become LLC members directly and get a 10% higher payment, due to tax withholding in Armenia, but then they can’t get a token to transfer until a year later, due to the SEC rule 144.
> Now if that seems like a bit of a maze run, that’s because U.S. securities law is tricky, global attempts at regulation are tricky, and maze running was the easiest way to properly do this for where the world is today. But, the not so easiest ways would be, do a Regulation A offering that goes up to 50M a year in issuance and costs about 120k to file, plus ~30-50k a year in accounting for SEC reporting. Lots of people can do that and arguably, have the registered stock that is held by the company back the issuance of a blockchain token as a bearer scrip – a term that is repeated across many State Corporations Acts. I’m exploring a deal right now where I would spin-off a company from an existing publicly traded company on the OTC exchange, at present, it seems like that’d be a legal way to get a public, regulated security with little upfront cost though 50-100k in reporting costs each year. I think I want to save that for the real estate product I’ve got coming further down the line. My current feeling is that BOND changes things a lot more for people in Latin America, Africa, and Asia than it would for U.S. persons.
A Wyoming LLC managed by an American (apparently) through his Wyoming corporation with end investors investing in an Armenian company set up by some dudes in the UK.
I always thought crypto was supposed to make things easier and more transparent, and be the antithesis of Wall Street. Things like this are even worse.
When Lehman wealth management called me right before the company collapsed fishing for ponzi money, even they weren't pushing me into an Armenian vehicle.
[1] https://news.bitcoin.com/interview-omni-layers-patrick-dugan...
> Things like this are even worse.
The text you quote says that things like this are how it is done today. That makes it not worse, "only" just as bad.
Not really.
When Big Wig Wall Street Investment Banker tries to get me to help foot the bill for his yacht fuel, he is compliant with US securities regulations and any offshore vehicles are based in tried and true jurisdictions, not countries like Armenia.
Also note that this guy is basically trying to create crypto-based bearer bonds. Do a search for "bearer bonds" and look into their history and current legal status.
> I always thought crypto was supposed to make things easier and more transparent,
It is, but only to armchair libertarians that live in a vaccuum and see the world as described in an economics textbook, where there are no transport costs and no regulations.
So, what's IRC Section 6050I and why was it being purposely omitted by the poster?
Answer:
https://www.irs.gov/government-entities/indian-tribal-govern...
> IRC Section 6050I requires that any person engaged in a trade or business that receives cash in excess of $10,000 in a single transaction or in related transactions must file Form 8300 PDF, Report of Cash Payments Over $10,000 Received in a Trade or Business.
So indeed it's an anti-money laundering provision. No wonder this gets the NFT crowd all riled up. I mean, little cartoon drawings being "bought" for six figures don't just sell themselves, right?
I was curious and that still didn't sound right to me, so I Googled it. It's a more sweeping set of changes, I think still aimed at money laundering.
This seemed like a neutral summary of the changes, though it lacks any analysis on what this means for crypto:
https://taxnews.ey.com/news/2021-1538-senate-passed-infrastr...
I worked at a remittance firm with a Money Services Business license back in 2008. I remember during the AML (anti money laundering) training that we had to report any transactions >= $10k to FINCEN within 15 days.
We were also trained to look out for 'structuring', where the same individual makes multiple transactions under $10k each, in order to evade those reporting requirements.
Undercook chicken? Right to jail.