Latvian NFT artist faces 12 years in jail over ‘money laundering’, €8.7 million art earnings frozen

Latvian NFT artist faces 12 years in jail over ‘money laundering’, €8.7 million art earnings frozen

Latvian developers and artists identified as Ilya Borisov are the largest after authorities claim that his non-fungible token (NFT) revenue of € 8.7 million is the revenue of money laundering and large-scale crimes. I am facing 12 years in prison.

Through his website, named Art is Crime, Mr. Borisov detailed how the government frozen his bank account without contacting him regarding the case.

On the incident timeline, the developer who earned money from the 3,557 NFT release said the incident process began in February this year, but he was notified of the issue on May 9.

“This decision was made on February 10th and states that we need to get a copy of it. I received it three months later,” Borisov said.

Lack of cryptographic regulations

Due to the lack of clear crypto tax regulations, the developers said they had contacted the Latvian Revenue Department (VID) on how to legalize income in cryptocurrencies. As a result, he was to pay € 2.2 million under his income tax in 2021.

He paid the tax after the agency registered as a “self-employed person” and advised him to pay the tax on the amount withdrawn in euros.

In particular, he made money during the 2021 NFT boom, explaining himself among the successful artists in the niche.

Borisov could challenge the freeze on his bank account through a lawyer, and the court ordered him access to money on June 30.

However, the account was never frozen, and it was later revealed that the chief investigator in the case had resigned. Interestingly, the new prosecutor who participated in the case also received an urgent order to seize his property.

As of July 19, he claimed to have shared a complete report of his activity and earnings history with the police as evidence of the legal source of his money.

Proceedings of the case

Mr. Borisov, a former employee of news site Meduza, emphasized that none of the prosecutors made an effort to contact him regarding the process. The developers then appealed to this decision, but further delays due to the bureaucracy are expected.

“We have filed a protest in court against the decision to seize my account dated July 3, 2022. The protest includes all documents available from the case and all my transactions and A file about my activity as an artist has been attached, “he said.

In this case, Borisov attempted to replace the investigator, but the court rejected it.

Borisov said the case had an emotional impact on him, in addition to the threat of losing money forever and serving him in jail. This situation was complicated by Russia’s invasion of Ukraine. It also affected relationships with other families whose father died before a solution was found.

When he vowed to keep fighting, Borisov said the blockchain opened up endless opportunities for artists to make a living, but still faced challenges from regulators.


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