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Comment by llamaimperative | Hacker News Reader

No that is more about money laundering

Whenever an absurdly priced work of art makes it to the news, laypeople immediately jump to the explanation of money laundering, but any artist, art purchaser, or even money launderer would know that this is ridiculous. You'd be an idiot to launder their money in the most publicized auction in the year. If you wanted to launder money, it would most likely be through low-profile private sales.

I agree that any individual piece is not guaranteed to be laundering, but the market as a whole is definitely pushed upwards by more factors than people's desire for historical artifacts or decoration.

In any case, in the true upper end of the market, most of these auctions are publicized but the buyers are behind many layers of indirection.

In this specific case we know who bought it Justin Sun. He's a Hong Kong based cyrptocurrency investor who ate it. So it seems like in this case it was more about getting some press, and probably a bit of distraction against some of the allegations against him.

Nope he didn’t eat it. He got a digital token with instructions on how to tape his own banana to the wall.

Before someone thinks I’m not serious - I am. That was out in the news today.

Yeah, not sure what is worse.

- that buyer didn’t get a real banana. Should have a lifetime supply for that price!

- Robert Ryman was exhibited in the Orangerie Museum and compared to Monet (in the equivalent sense).

The bulk of Ryman’s art is a plain white canvas. Not a single dot. Not even a frame. Textured drywall painted with bargain white paint is far more interesting…

My drywall contractor should be a billionaire…

"Ahh, you were at my side all along... my true mentor, my guiding moonlight..." https://en.wikipedia.org/wiki/Greater_fool_theory

It's more about people with a lot of money hoping to sell it for a greater return, while maybe also having shit taste in art. In five years it'll be at an auction and sell to some other person with too much money in hopes of making a profit on it later on.

Nah, it has to do with money laundering, tax evasion, and easy international money transmission. There are tons of interesting tricks you can pull once you have your hands on a small object "worth" hundreds of thousands or millions of dollars whose very illiquid + inefficiently priced sales also affects an entire market of similar objects.

The guy who bought it, Justin Sun, ate it. So unless it's going to get really meta (and stinky) he's not going to resell it.

That would be a piece of art.

Net worth $1.6B. So eating a $6M banana is a PR stunt.

Edit: Also doesn't mean it can't be resold as that banana gets replaced x number of days.

The thing being bought by him was not a specific physical banana, so he can resell what was sold just fine if he wants to.

let's buy that argument for discussion's sake, that doesn't contradict with the notion that networking is important.

I wasn't trying to contradict that

How does that work exactly?

Have you ever tried to move $10MM between jurisdictions before? It's much easier when you can put it in a box that looks like, weighs as much as, and actually is a piece of cloth inside of a box, and then open the box up wherever you want it.

(To be clear, the banana piece specifically is probably a bad artwork to use for financial engineering purposes, but for the art market as a whole these dynamics add a lot to the prices near the top end)

that isn't money laundering though.

I wonder that too fwiw, what's the exact mechanism with this banana NFT-purchase by which elicit money (from who (?)) is now being laundered as legal income (of who (?)). How does the process work?

Again, I have no clue whether this banana falls into this category, but generically and hyper-simplified: you have dirty money in a high-scrutiny jurisdiction, you buy a piece of art for $10MM, you move that piece of art to a more permissive jurisdiction and sell it for $8MM. That buyer gets a good deal and you just mostly cleaned $10MM for 20% in one transaction, which you can then layer into its now-local (permissive) economy for further cleaning before pulling it back out, apparently legitimately, to whatever jurisdiction you want.

You've avoided an international (currency) transaction of $10MM which would be flagged by pretty much every authority with oversight. Just two high-value domestic art sales, which happen all the time.

> you have dirty money in a high-scrutiny jurisdiction, you buy a piece of art for $10M

How does the sale take place? Cash? So when the seller deposits the cash, no one asks where it came from?

It came from an art sale… you can go read an article about it in the news, in fact, and sure you may think it’s ridiculous but that’s just because you’re uncultured and don’t understand Fine Art. People are demonstrably willing to pay millions for bananas on walls.

Obviously it attracts some attention (we’re here talking about it), but a whole lot less than a wire transfer of $10MM out of the country which would trigger SARs at several levels.

Ah so why do the sale at all then? Why not just deposit $10MM in cash at the bank and say it was from an art sale? Something is missing in your explanation.

Are you an artist who'd pass KYC for doing $10MM art sales...? If so, then yeah, you probably could do that.

So you're just making things up as you go along? You haven't really explained the mechanics at all and are doing a lot of handwaving.

Any examples of this happening? Famous artwork being bought in us (high scrutiny preusmably) then sold in , i don't know, Switzerland (low scrutiny presumably). And then repatriated!!

Seems a lot of steps on the way.especially in crypto era.

Anyway, would love to see some real examples here. Why can't it just be exuberance, pumpanddump if we want to be cynical.

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