A completely crazy story about how a programmer made millions of euros on software-generated NFT art – and as a result, the Latvian authorities accused him of criminal money laundering and seized all his property (despite the rather big taxes paid). The situation continues to develop, one might say, live.
The protagonist of this story is Ilya Borisov, a 39-year-old programmer who now lives in Latvia and previously worked for Meduza magazine. Below is a brief retelling based on his articles in the Vastrik Club and whole sitewhich he created to publicize enough of the hellish story that is happening to him now.
NFT to the moon: becoming a millionaire artist in less than a year
Ilya started doing generative art back in 2018. In fact, the idea here is to try to use some algorithms in order to create audiovisual art based on them. In short, lines of code instead of an easel and paints (at least, I see something like that).
One of the author’s ideas was the concept of “every click = new art”. On the site you can play with art generatorwhich allows you to literally interact with works that respond to mouse clicks and cursor movements.
In 2021, Ilya has already started selling his generative art in the form of NFTs. It all started, in fact, from complete zero and sales of 10 euros, but after six months he became one of the most successful artists in the world (it turns out that the author’s personal hobby successfully coincided with the peak of popularity of the entire NFT theme). Earnings for 2021 amounted to as much as 4000 ETH (let me remind you that Ethereum quotes fluctuated around $2-4 thousand that year).
Ilya writes that from the very beginning he was registered as a self-employed person (artist): he regularly paid all quarterly taxes and was going to pay annual taxes (which is paid, as in Russia, the next year after the reporting year).
In 2021, Ilya withdrew €8.7 million to the bank, the total tax on this proceeds amounted to €3.1 million (about 35%).
From a successful artist to an allegedly persecuted “criminal”
Back in October 2021, Ilya Borisov was invited to “friendly tea” by the Latvian State Security Service – he asked questions about how to achieve success for a generative artist, and wished him good luck in further conquering the NFT scene.
And already on February 10, 2022, Ilya’s bank accounts were suddenly arrested by Latvian law enforcement agencies. Ilya writes that the police deliberately did not issue an arrest warrant for three months, and he could not get a shred of information about what was going on.
As a result, it turned out that he was accused of money laundering. At first, the decision to arrest was quickly protested, but then a legal blockbuster began: the bank refuses to unblock accounts on the basis of a court decision, the investigator in the case quits, her colleagues, using the “state of emergency”, raise the prosecutor’s ears on Sunday, and he signs them new arrest… Read full story Elijah’s websitethere is very interesting.
In general, as a result, a new arrest again went to the bank, which immediately blocked the amount that exceeds the entire capital of Ilya by 12 thousand euros – so he turned from the largest taxpayer into a debtor.
What’s going on now
Ilya, apparently, is permanently freaked out by what is happening and is trying, on the one hand, to collect the maximum documentary base for all the income received (on July 19, he handed over a detailed report to the police), on the other hand, he tries to make the situation as public as possible (this is what the site is dedicated to Art Is Crimewhere he posted in open access all the information on the case).
I recommend taking a walk around the site – a lot of work has really been done there to collect and document this story. At the very least, it’s very interesting.
Personally, I will follow the development of this “detective” with great interest. The case itself seems to be a landmark. And I wish good luck to Ilya in the fight against the bureaucratic machine!
I lead Telegram channel RationalAnswer about reasonable approaches to personal finance and investments (and in general about everything interesting that happens in the modern world at the intersection of finance and technology).