5 Surprising Insights From The US Treasury Department’s study Of The Global Art NFT Trade
5 Surprising Insights From The US Treasury Department’s Study Of The Global Art NFT Trade
The U.S. Treasury’s recent study on the global art trade has provided an insightful look at the inner workings of the art market, the regulations currently in place, and emerging areas potentially in need of additional regulation. The study doesn’t shy away from acknowledging the darker sides of the market, taking the time to debunk some myths and misconceptions about art crime and money laundering.
The study found that most art market participants are not compelled by federal regulations. While most art market participants were not subject to any federal regulations related to tracking money and how it is used, many people choose to do so voluntarily. In fact, these voluntary practices are slowly becoming the norms in the industry.
The study also found that inaccurate claims about the art market create risk and the perception that the market is unregulated. Inaccurate claims about the art market create risk because they make it look like no one is watching the market. That, in turn, attracts criminals wanting to use the market to launder money.
The study found that there is a difference between art crime and crimes perpetrated through art. There are important distinctions between art crimes and crimes that use art to launder money. Art crime, for example, might just entail stealing a painting from a museum. If someone uses a fake painting to launder the proceeds of a drug deal, however, that’s a crime that was perpetrated through art.
The study also recognized the need for a higher threshold for art market transactions. When it comes to taxes, the IRS already has a rule that someone buying or selling a work of art worth $50,000 or more must provide extra information. The study suggested that something similar should be in place for all art market transactions.
Lastly, the study found that information sharing between art market participants is crucial for countering money laundering and other financial crimes. In stressing that it’s important for everyone in the art market to share information, the study pointed out the benefit of everyone being able to recognize and report suspicious activities.
Overall, the U.S. Treasury Department’s study of the global art trade found that, while many art market participants voluntarily maintain AML/CFT programs, more regulation is necessary to prevent crime perpetrated through the market.
Ultimately, the study called for a higher threshold for reporting suspicious activity in the art market, a proposal meant to protect both the market and those who participate in it.
What role do you think the government should play in ensuring the consistency, security, and integrity of the art market?
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can follow Olga on Twitter @olgavmack.