Iggy on Nostr: I asked Grok: "Eli5 how art sold is money laundering?" Here's how it can work in ...
I asked Grok:
"Eli5 how art sold is money laundering?"
Here's how it can work in simple terms:
1.) Buying Art with Dirty Money:
Someone with illegal funds (like from drug dealing) buys a piece of art for an inflated price. Because art's value is subjective, they can claim the price is justified, even if it's much higher than what it's truly worth.
2.) Anonymity in Transactions:
The art world often allows for anonymous buying and selling. This means that the identity of the buyer or seller might not be known, making it hard to trace back the origin of the money. Art can be bought through shell companies or intermediaries who obscure who really owns the money.
3.) Storing Art in Freeports:
Art can be stored in special zones called "freeports" where tax on goods is suspended. Here, the art can change hands multiple times without leaving, helping to further obscure the trail of money. Each "sale" might inflate the art's price, making it seem like the money is from legitimate art sales.
4.) Inflating Value:
Through these transactions, the value of the artwork can be artificially increased. When it's sold later at this higher price, the money seems clean because it's from an art sale.
5.) Final Sale and Integration:
Eventually, the art might be sold to a legitimate buyer at this inflated price. Now the money from this sale can be used freely or reinvested because it appears to come from legal, traceable income.
This process takes advantage of the art market's lack of regulation compared to financial markets, its subjective valuations, and the privacy in transactions. It turns "dirty" money into "clean" money by giving it a legal source through art sales.
Keep in mind, this is an oversimplified explanation, and while this method can be used for money laundering, not all art transactions are involved in such activities.
quoting note1n6r…lvw8Ever want a quick laugh, just google what’s been sold as art.
Apparently around Black Friday cards against humanity sold a potato, with diamonds shoved into it 🤣