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Over the holidays I learned a friend of a friend who has been playing with AI-generated art earned ~$400k selling some of this stuff as NFTs.

I'm wondering what are the odds my friend's friend just needed to launder some illicit crypto gains, and NFTs are a perfect zero-cost substrate...

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How would that work.

Whether you take money out of the market or make a sale of an NFT, both are taxed income, no?

The whole point of money laundering is legitimizing ill-gotten income so you can both claim and pay taxes on it, with a plausible source story should anyone come asking.

It's got nothing to do with tax evasion, quite the opposite actually, AIUI.

Now I wonder. Area NFT sales taxed as capital gains or income? If later, then it really makes no sense to wash via it.

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