Latvian NFT artist €8.7 million earnings seized after money laundering allegations

Latvian NFT artist €8.7 million earnings seized after money laundering allegations
Latvian NFT artist €8.7 million earnings seized after money laundering allegations

The Latvian government has frozen NFT artist Ilya Borisov’s earnings of around 8.7 million euros due to allegations of money laundering. He faces up to 12 years in prison if found guilty.

According to Borisov, the authorities had filed a case against him in February 2022, but he was only notified about it in May – three months later.

Borisov said €8.7 million was earned from the sale of 3,557 NFT issues during the 2021 NFT market boom.

Earnings or money laundering?

Due to the lack of clear rules regarding crypto taxation in Latvia, he wrote to the Latvian State Revenue Service (VID) about ways he could pay his overdue taxes.

He revealed that the agency advised him to register as “self-employed” in the country and pay tax on the amount withdrawn in euros. Based on these instructions, he paid up to €2.2 million in taxes in 2021 alone.

After being notified that his accounts had been frozen, he proceeded to challenge the action in court where he won a ruling in his favor to have the freeze reversed.

But despite this, the authorities have denied him access to his accounts.

Borisov said:

“We submitted a protest to the court against the decision to seize my accounts dated July 3, 2022. The protest was accompanied by all available documents from the case and files with all my transactions and my activities as an artist.”

Borisov has described the Latvian government’s action as a significant challenge to the crypto space, adding that “it is a crime to be an artist in Latvia.”

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Crypto and NFT taxation

Most major governments worldwide have yet to issue a framework for how crypto income should be taxed, creating problems for crypto traders and NFT artists.

In India, crypto traders face 30% taxation and 1% tax deducted at source for every crypto transaction. This has caused a massive decline in the trading volume of exchanges in the country.

South Korean authorities recently postponed the implementation of their 20% crypto tax law until 2025, when a better investor protection system would hopefully be in place. Meanwhile, Thailand was forced to withdraw its decision to enforce a 15% crypto tax following the overwhelming negative reaction of the public to the law.

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