Key Takeaways:
- Latvian authorities have cracked down on NFT artist Ilja Borisov
- The local police have ordered the artist's bank to freeze his accounts with over $8 million
- Borisov, who goes under the synonym 'Shvembldr', has paid over $3 million in taxes
YEREVAN (CoinChapter.com) — The Latvian Government has accused successful nonfungible token (NFT) artist Ilja Borisov of money laundering. As a result, authorities have frozen his earnings of €8.7 million (over $8.8 million). In addition, they have seized properties from him, including his car.
Borisov, who goes by the synonym Shvembldr, could face up to 12 years in jail for his “crime” of being an NFT artist.
Fed up with the constant harassment from law enforcement authorities, Borisov has created a website to narrate his ordeal.
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The NFT artist chose to pay his taxes, yet…
The decision of Latvian authorities to crack down on the artist is bizarre. Borisov had earned millions of euros through NFT sales before he decided to withdraw the money to his account via Coinbase.
Realistically, he could choose to hide his earnings from his Government.
“I had a choice. I could not withdraw anything in the Latvian bank, pay absolutely no taxes, or change residence, and pay much less tax. There was no reason why I should not do that except one. I am a patriot,”
Borisov writes to the Latvian police.
Instead, he decided to take the legal route. However, there were no clear regulations because cryptocurrencies and NFTs fall in a gray area. Hence, he wrote to the Latvian State Revenue Service (VID) enquiring how he could pay taxes.
On their advice, he registered himself as a “self-employed person.” He then withdrew his Ethereum (ETH) holdings euros and paid his taxes.
He claims to have paid as much as €3.1 million in taxes. According to his website, €2.2 million was in 2021 alone.
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Is it a crime to be an artist in Latvia?
Despite his honesty, the Latvian authorities allegedly filed a case against Borisov in February 2022. However, they only notified him about it three months later, in May.
Before an official notice, his bank had informed him that the Latvian police had frozen his account after he could not make a payment for a music software he wanted to purchase.
The artist got a court order to unfreeze his account after hiring a lawyer. However, the SEB bank, where he has his account, refused to do so. Instead, the bank insisted that the court order had not reached them through formal channels.
Before he could organize for the order to be sent, the head of the Organized Crime Unit of the Latvian police ordered a new investigation against him.
Through the new investigation, the police looked into “criminally gained funds” that the NFT artist had acquired “using a complex scheme of transactions.”
Interestingly, the artist had passed two detailed verification processes in the bank. Moreover, he had also appeared for investigation in the State Security Servies of Latvia almost a year earlier.
The NFT artist is angry and hurt. Unfortunately, authorities have reciprocated his honesty and transparency by treating him worse than a criminal.
The entire ordeal has made him question his Government. “It is a crime to be an artist in Latvia,” he says.
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Latvian authorities anti-NFT? Borisov looks for support
The anti-NFT attitude of the Latvian authorities is harming the country. As Borisov alleges, the proceedings have rendered him unable to pay the remainder of his taxes.
His art has brought over $3 million in taxes into the country. However, he now cannot pay the remainder of his taxes as his funds remain frozen.
This action of the police has caused losses not only for Ilja Borisov but for the Latvian Government. Other artists and individuals will now deliberately avoid declaring their crypto incomes, so they don’t have to go through the same process.
In desperation, the artist is now looking for the global community’s support.
“This is an attempt to make anyone associated with selling art as NFTs a renegade and a criminal. The hatred is based on incompetence and ignorance. The only way to fight this is to spread the word. I count on your support in this case,”
Borisov pleaded.
The NFT industry is becoming more popular every day. Governments should look to draft measures to integrate the growing community into the taxation system.
By cracking down on artists, authorities do more harm than good.
