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Instagram Issues A Warning To A Colombian NFT Artist For Selling Cocaine NFTs

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NFTs have increased in popularity to the point where they are now one of the most well-known selling methods online. Due to the ease with which these NFTs may be minted, people are now selling photos of everything. People have sold everything from terrible rock photographs to NFTs. To a $250k Instagram influencer who is selling her love as an NFT. The NFT craze has even reached children. For example, 12-year-old Benjamin Ahmed made six figures selling an NFT series called Weird Whales that he designed.

There appears to be no limit to what can be marketed as NFTs on the Internet at this time. Camilo Restrepo, a Colombian artist, has now demonstrated no limit to what can be coined and sold as NFTs.

Cocaine NFT For Sale

Medellin-based On June 17th, Restrepo began minting and selling cocaine NFTs. The NFTs were 3D images of white rectangles offered as part of the NFTa series, dubbed “a ToN oF coke” by the artist. The white rectangles represented one-kilogram cocaine bundles, which are commonly used to sell hard drugs. Buyers also get to keep the cocaine packs’ NFTs. About 1,000 of these NFTs were produced by Restrepo and were intended to be sold as part of the same series.

Every “bag” of NFT cocaine that the artist sold was supposed to be documented on social media. Restrepo, on the other hand, quickly discovered that his main issue would be marketing. Specifically, he is using social media sites to advertise his art.

Every time the artist posted a sale of an NFT on platforms like Twitter, Restrepo would find that the post was soon after taken down or his account shut down. This happened after the artist had his account reported after posting the sale of cocaine NFT. Moving to Instagram, the artist ran into pretty much the same problem with the image-dominated social media platform.

Restrepo has already had two of his cocaine NFT posts removed. With a warning that if he made the third post, his account would be removed forever if it was taken down. As a result, the artiste’s social media promotion is practically impossible. “I guess the algorithm doesn’t get the difference between crypto cocaine and the actual thing,” the artist told Input Mag of the Instagram warning.

Money Laundering?

It has long been assumed that the widespread acceptance of NFTs is due to their use as a means of money laundering. In addition, cryptocurrencies have been linked to the illegal drug trade. As a result, Colombian banks have made it challenging to purchase cryptocurrency in the country. Although the artist devised a workaround by having the Ethereum used to pay for his NFTs returned to his buyers, who would then send Colombian pesos to his bank account in exchange for the cryptocurrencies.

Mr. Whale, a well-known crypto expert, brought attention to the usage of NFTs for money laundering last month. According to the analyst, wealthy people were merely utilizing these NFTs to shift their ill-gotten money through a channel that cleaned it up and made it look legal. Mr. Whale likened the approach to how money is laundered through the use of physical art. And it’s easy to see where the analyst is coming from, given the high quality of the art being sold for millions of dollars as NFTs.

ART & COLLECTABLES

Participants in the NFT Market in the United States may Face Harsh Tax Penalties

As the NFT market grew in 2021, so did the tax questions for the next tax season.

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#nft #nfthours #taxes #irs

The Internal Revenue Service (IRS) wants a piece of the NFT loot. There is uncertainty over how NFT holders should be taxed, although tax experts estimate that taxes could be as high as 37%. According to James Creech, a tax attorney in San Francisco, “you don’t get to report earnings or losses because the IRS has failed to provide guidance that satisfies your expectations.”

According to Chainalysis, the NFT business would see $44 billion in transactions in 2021. Some artists made large profits, with one American artist selling an NFT for $69 million-plus royalties. This raises some concerns about how they ought to be taxed. Although the taxation of NFTs is not apparent at the moment, that does not mean they should not be declared on your tax return.

Those who failed to declare quarterly earnings from NFTs may be in for a rude awakening when penalties are imposed the next tax season. NFT owners can sell their NFTs on NFT marketplaces like Opensea or Rarible, and they may be liable to income tax of up to 37 percent when they do so. In addition, if NFTs use another cryptocurrency to purchase the NFT, they will owe capital gains taxes to the IRS.

Experts on taxation weigh in

NFT taxes are estimated to be worth billions of dollars, according to Arthur Teller, CEO of TokenTax. However, aside from the 37 percent income tax, the tax requirements are murky. For example, should they be taxed at the same rate as capital gains on art collectibles, currently 28 percent? Moreover, in light of Joe Biden’s proposed tax infrastructure package, the Treasury Department provides no detailed guidance on how NFTs will be taxed. According to Jarod Koopman, a director of the criminal investigation at the IRS, as a result, tax evasion may become a distinct possibility.

The IRS has issued general crypto tax guidelines

Notice 2014-21, 2014-16IRB938, Rev. Rul 2019-24, 2019-44 IRB1004, and ILM 20214020; the IRS explains how bitcoins are taxed. It should be noted that none of these include any mention of NFT. Section 61 of the Internal Revenue Code (IRC) may necessitate the inclusion of creator income on the revenues of NFT sales and royalties. In contrast, Section 197 may allow amortization to buyers who use the NFT for business purposes. Buyers from other countries will be subject to local taxes. At the same time, if the copyright owners are citizens of the United States, they may be required to pay state and federal taxes on any royalties received.

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ART & COLLECTABLES

On OpenSea, a 22-year-old Indonesian Boy Earns $1 Million by Selling NFT Selfies

Ghozali spent five years in front of his computer taking selfies, which he then transformed into NFTs and posted to OpenSea in December 2021.

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#nft #nfthours #millionaire #22yearsold

According to reports, an Indonesian college student made a million dollars from NFT versions of his selfies on the OpenSea NFT marketplace.

A 22-year-old Indonesian computer science student named Sultan Gustaf Al Ghozali converted and sold approximately 1,000 selfie photos as NFTs. Ghozali claims he collected images of himself for five years, from the ages of 18 to 22, as a means to reflect on his graduation journey.

Ghozali took selfies in front of his computer, whether sitting or standing, which were eventually turned into NFTs and posted to OpenSea in December 2021. Without expecting severe buyers, the artist set the price for each NFT selfie at $3. Ghozali commented while marketing his expressionless images:

“You can do anything like flipping or whatever but please don’t abuse my photos or my parents will very disappointed in me. I believe in you guys so please take care of my photos.”

Ghozali’s NFT offering blew up, contrary to his wildest expectations, as notable members of Crypto Twitter showed support by acquiring and pushing the offerings.

According to AFP, one of Ghozali’s NFT sold for 0.247 Ether (ETH) on January 14, valued at $806 at the time of purchase. Along with the selfies, the young entrepreneur adds a touch of individuality by offering background information, which adds to the NFT’s rarity.

According to a Lifestyle Asia post, Ghozali’s selfie NFTs sold for 0.9 ETH or almost $3,000 at their peak. Ghozali’s collection eventually achieved a total transaction volume of 317 ether, worth over $1 million. Through OpenSea, the young artist made his first tax payment based on this money.

Despite the general crypto market’s recent sluggishness, the NFT marketplace and blockchain gaming business continues to see large transaction volumes.

According to DappRadar data, the number of UAW connected to Ethereum NFT DApps has increased by 43% from Q3 2021. Furthermore, NFT trading generated $11.9 billion in the first ten days of 2022, up from $10.7 billion in Q3 2021.

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ART & COLLECTABLES

Here’s Why More Than 14,000 ETH Was Burned in the Last 24 Hours

Because of the tremendous rise in popularity of NFT collection, the Ethereum burn rate has surged once more.

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#nft #nfthours #ethereum #burn

Increased Ethereum gas expenses have resulted in the burning of more than 14,000 ETH coins in the previous 24 hours. The increasing burn rate was caused by a surge in interest in NFT initiatives.

NFTs on the rise

While some in the cryptocurrency and digital asset communities feared the demise of the NFT business following a significant reduction in selling volume and transactional activity, specific NFT projects have seen a more than 100 percent spike in activity in the first days of 2022.

OpenSea NFT marketplace was one of the biggest burn providers, according to burn sources, with 3,300 ETH destroyed in the last 24 hours. In addition, shared Ethereum transfers caused the burning of 1,200 ETH.

Uniswap, Tether, and GenieSwap sent slightly more than 1,300 ETH to the burn address.

Is Ethereum on the verge of deflation?

More Ether has been burned in the last 24 hours than has been issued by miners, making January 9th another deflationary day for Ethereum. When the main network experiences high fees or congestion, Ethereum typically deflates.

Ether transaction fees have surged by more than 150-200 percent during the most recent NFT popularity surge, resulting in dramatically higher network user expenditure.

While Ether is constantly experiencing deflationary days, its market performance does not appear to be following the trend, with a 16.6% correction from January 5th to 9. At the time of writing, Ethereum is trading at $3,145, having had its first positive day in the market in four days, with a 2.4 percent price increase.

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