Bankless Brazil Sneaker Drop, Secret NFT Codes, and Pop Crypto Updates | Decentralized Arts
BanklessDAO Weekly NFT and Cryptoart Newsletter
Dear Bankless Nation,🏴
Most of us have indulged in talks about NFTs. While in most cases the speeches will have been based on curiosity towards new artistic movements and innovative ways of expression, in some cases we’ve explored questions about the ethics and cleanliness of the NFT market.
Technology is neutral. NFTs are nothing more than the ability to make digital assets unique and recognizable. None of us are responsible for the use of technology by third parties, each of us responds to our own ethics.
Are there those who use NFTs to wash trade and cheat unsuspecting buyers? Certainly. Are there those who launder money through NFTs? Probably.
In all other cases, it is not the technology that must enforce the laws, but the authorities where transactions are carried out.
The fault of a few must not become the condemnation of all. The illicit behavior of some speculators or scammers cannot - and must not - hide the value of a new tool to express art, as well as the passion of this creators’ economy: a movement of many artists and designers who are transforming the world and whose work this newsletter will continue to speak to.
Welcome to Decentralized Arts.
Retrospective on Bad Actors in the NFT Market
The many successes and sales records capitalized by the NFT market, shouldn't stop us from asking uncomfortable questions, the first of which is:
Is the NFT market vulnerable to money laundering?
According to the US Treasury study on the art trade published a few days ago, some unclear financial transactions are evident in the NFT art market, which one must beware of.
The NFT market in the first three months of 2021 generated $1.5B in trade according to the report, and grew by 2.627% compared to the previous quarter.
Despite the evidence of the existence of a possible money laundering problem in both the traditional and blockchain art market, the US Treasury said it was against the enactment of restrictive laws and suggested focusing instead on the causes of a possible vulnerability (VI. Emerging Digital Art Market, pg. 25).
The NFT world, and the market built upon it, is new, dynamic, rich and so full of potential that it is forcibly attracting even unethical glances. This is a market that makes it possible to create solutions that were previously impossible, which escape a clear regulatory framework, both from a legal and a fiscal point of view.
With NFTs, unlike physical works of art, the transfer of ownership has no geographic boundaries, is instantaneous, and can occur without the potential regulatory or financial cost of buying or selling a physical object.
All these characteristics must be studied in depth to determine how to limit the chances of falling into the danger of money laundering.
The US Treasury Department has also reported the possibility of criminals conducting self-laundering initiatives by purchasing an NFT, transferring it to themselves with different digital accounts and increasing its value, before selling it to an unsuspecting buyer.
The Art Dealers Association of America, which represents nearly 190 galleries in 30 U.S. cities, has endorsed the Treasury Department's recommendations, indicating there is not enough evidence of a money laundering risk in the NFT art market to justify subjecting art dealers to new regulations under the Bank Secrecy Act (BSA) compared to other much larger sectors that are currently not subject to the BSA.
Recommendations made in the study include:
Increasing Information sharing programs to improve transparency in the market;
Updating guidelines and training for law enforcement and asset recovery agencies, application of anti-money laundering regulations (AML);
Fighting against the financing of terrorism for specific market operators not subject to the Banking Secret
A stricter approach is suggested by Rusi, the Royal United Services Institute, the world's oldest think tank and the UK's leading defense and security think tank.
According to Rusi, a "know your customer" (KYC) policy system should be similar to that of the traditional art market, for example by creating a register of stolen or fraudulently purchased NFTs, such as the Art Loss Register. Nft's online auction houses, according to Rusi, should also be regulated to reduce the risk of money laundering.
To close this overview we cite an article by Chainalysis, which is a valid warning for those who care about an NFT market that is both ethical and clean.
The post is based on a study by Chainalysis, published February 2, 2022, which highlights a small growing share of activity in NFT markets that is attributable to money laundering.
Chainanalysis reached this conclusion by analyzing some crypto addresses, already known to experts to be associated with numerous scams and operations related to malware. In the fourth quarter of 2021, this amounted to $1.4M, while now it seems to have increased to exceed $5M million with an ever-increasing trend.
One of the most popular practices used is wash trading, the sale of NFTs by sending money to oneself from one's own secondary cryptocurrency wallet. Chainalysis specifically noted a few thousand similar cases where a common third address had sent funds to both the buyer and seller. One of the most prolific players would have made as many as 830 such sales, while the total profit recorded to date from NFT money laundering would be around $8.9M.
As explained by the researchers, “All of this activity represents a drop in the bucket compared to the $8.6B worth of cryptocurrency-based money laundering we have been monitoring throughout 2021. However, they pose a big risk to build trust in NFTs and should be monitored more closely by regulatory authorities and law enforcement agencies."
At the end of the article we can conclude that, although NFTs are attractive to money launderers, there is currently no concrete data to state that their use for this purpose is significantly worse than it is in the traditional art world. Furthermore, the data collected and studied by the various control bodies suggests that the rigorous introduction of the KYC / AML standards will help to combat this problem.
The success of a new sector attracts and will always attract a lot of attention from the most diverse actors, each of which acts with different purposes. To the thousands of creators interested in selling their works on a new market, we can highlight the presence of many honest and "organic" collectors and buyers, accompanied by a small percentage of people who will continue to try and exploit new technologies amidst uncertainties of the regulations.
BanklessDAO Artist Showcase
🧑🎨 Artist: Arnld
🏦 Auction Type: Open edition
💰 Price: 0.03 ETH each
DA: How’d you get into NFTs?
A: I believe Youtube played a huge part, as I learnt about NFTs through videos. After joining the Bankless Brazil DAO I fell deeper in the rabbithole.
DA: We loved your disembodied sneaker tweet. What did you find on the inside and how did that process feel?
A: I’m a very curious person and whenever I want to learn something new, I go all in. Just a quick backstory, my parents both worked their whole lives in the footwear industry, but it never really connected with me. I did the graphic design route and studied design and all its forms (product, strategic, process, etc). Around 2018, I wanted to shift my career as sneakers started to become a little bit of an “addiction.” I was buying sneakers a lot, but I also got curious on how they are made, and how could I make one as well. That's how my sneaker story started. So the process of disembodying a sneaker to see what was on the inside was fantastic! It's what I do with any new thing, I go all in and see what's inside!
DA: Do you think an NFT of a sneaker you can’t wear is similar at all to a glass of water you can’t drink?
A: Tricky question, but I would say no. The NFT has a whole community behind it, it represents a movement, it sends a message of what we stand for. And we never know what could come in the future, what if we could turn it into something real? Also, a glass of water you can’t drink just seems rude if the person is not sharing it with you. 😆
DA: Everyone knows sneakers are cool and a fashion forward asset, can you help us understand why?
A: Sneakers represent your identity. It shows what you stand for and how you want the world to “read” you. You could have an all black outfit, very simple, not much to see there, and some great sneakers, people will get you right away, sneakers have this power.
And pretty much everyone wants to look cool and feel good and sneakers are a powerful tool for that, to increase your self esteem, you know?
DA: Where do you want your NFT work, and/or bDAO Brazil to be in five years and why?
A: That’s a hard question to answer as everything seems to go so much faster in this cryptoverse. Maybe five years is like 20 in the “outside world” hah. But I really do want to keep working on my NFTs and I actually already have an idea for another sneaker collection that I want to be dropping in the Q3 2022. It’s going to be a social project but there are a few things I still need to figure out.😉 I want my NFT work to expand, to evolve, I see a really fun future!
As for the BanklessBR DAO, I believe we are going to be the biggest crypto media group in Brazil for sure. I say that because of how much we have grown in so little time and how dedicated our members are with the projects the DAO runs. We have an amazing group of people thinking DAO 24/7 and I see a promising future for the DAO.
Collect your BanklessDAO Sneaker in the BanklessDAO Open Sea account!
🌐 Curated NFT News
Decentraland Hosts Metaverse Fashion Week Next Month
The first Metaverse Fashion Week is set for March 24-27. This is a free to attend event, but attendees need to have an Ethereum wallet. However, some events will be exclusive to NFT holders of particular brands.
The first fashion house that announced the participation in this event was Hugo Boss and many others have followed. Participants will be able to purchase digital wearables, but some fashion brands will allow people to purchase real life pieces.
Alfa Romeo to Integrate NFT and Blockchain Technology in Cars
The Italian car manufacturer has announced that it will integrate blockchain technology in the 2023 Tonale SUV that will be available to order in Q4 of 2023.
The company will use NFTs for data purposes. The NFT will be capable of certifying the vehicle upon purchase and it will record the data of the car for the entire life cycle including service and maintenance records. However, the car needs to be serviced by a certified Alfa Romeo dealer to record this.
The head of Marketing at Alfa Romeo, Francesco Calcara, said: “Digitalization is a key enabler of our metamorphosis. Tonale is the first car ever to keep a blockchain, non-fungible token. NFTs use the same distributed information logic that protects your Bitcoin. It records all data on the blockchain.”
Non Fungible Conference, April 4-5
Non-Fungible Conference is the major European Conference about NFTs taking place in Lisbon, Portugal on 4 and 5 April 2022. A two-day event filled with talks, panels, workshops and experiences that bring together artists, projects, platforms, collectors and investors from the global NFT community.
More than one hundred speakers and international artists and 1500 attendees are expected for this 1st edition, which will focus on four main themes: Gaming, Collectibles, Art and Metaverse.
More than a conference, NFC is a pure experiential event, with an NFT art gallery, a shopping district and of course, colorful parties and cosplayers joining the fun!
The private sales have just started but the only way to register for the event and get a 90% discount on tickets is to get a green list code. And we have some codes from you…
When you are on the website, just click on Get Your Ticket Now and then enter the promo code: dcartGMI, the hidden ticket will appear.
BanklessDAO Artist Showcase
Discord: Chrisfcrypto.eth 🏴#3896
I am a retired cancer physician now using the other half of my brain - the creative side. I joined BanklessDAO at its inception and have been active in the Design and AV Guilds, developing marketing videos, POAPs and NFTs. Working with BanklessDAO has opened up other opportunities with other like-minded DAOs, such as HumanDAO and POAPathon.
DA: What does it mean to be an artist in bDAO?
Ch: Freedom to express oneself in unconventional ways and with using many different types of media, the most challenging have been the animated NFTs I have been making for various projects. My art is different and forever moving in this space. This is challenging, but very helpful at the same time to keep you growing on your journey. Just as the crypto space changes every year, a new space opens with endless opportunities. I enjoy working collaboratively with other members of the Design Guild and supporting others, while at the same time growing with every challenge.
DA: What are your thoughts on the NFT world?
Ch: Although a new space, it is easy to settle into the rut of 'generative' art, using code to mint 10,000 different versions. I prefer to make unique individual pieces of art, with a comic slant and love the challenges of learning new platforms with their pros and cons.
DA: How can DAOs help art and artists?
Ch: Primarily support and collaboration, but also as an outlet with encouragement from like-minded people. DAOs are the companies of the future, and I prefer working with those that I choose to work with, something not possible I.R.L.
Last week’s weekly showcase numbers
Artist Blair Zaye made a total of 0.57 ETH in sales with the CryptoGrillz NFTs.
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