Wednesday, August 23, 2017

A Potential Source of Demand for the Art Market (and bitcoin)

News on the US Treasury's Financial Crimes Enforcement Network.
First up, an observation from Marion Maneker at Art Market Monitor:
In an effort to prevent high-end real estate purchased through LLCs or other shell companies from becoming a money-laundering channel, FinCen created a pilot program to use title insurance companies to reveal beneficial ownership. That program has now been expanded to include Hawaii and six other cities:
In January 2016, FinCEN issued GTOs to require U.S. title insurance companies to report beneficial ownership information on legal entities, including shell companies, used to purchase certain luxury residential real estate in Manhattan and Miami—specifically, luxury residential property purchased by a shell company without a bank loan and made at least in part using a cashier’s check or similar instrument....MORE
If you don't know his background, before Art Market Monitor, Mr. Maneker was publisher of HarperCollins’s business books imprint. He goes on to note:
... Nonetheless, tighter controls on real estate transactions may have the effect of diverting more surplus cash into tangible assets like art and collectibles.
Which leads us to a core, possibly existential question regarding cryptocurrencies.
From FT Alphaville:

What is crypto’s agenda really?
Are crypto pioneers looking to prove that laissez faire anarchic mechanisms are capable of creating a caveat emptor stateless decentralised utopia where every man is king of his own domain, and where the state is rendered entirely pointless?

Or are they engineering a means by which the world’s dark markets, criminal networks, rentiers and tax-evaders can continue to suck on the productive population through opaque and shadowy parallel networks, while they continue to give nothing back in return?

Because if it’s the latter, a steady campaign of propaganda to present what is effectively the reemergence of unregulated and predatory shadow banking systems — this time on steroids — as legitimate technical innovation would be necessary.

For this — arguably the world’s greatest mafia ruse — to work, everyday Joes would have to be convinced that handing hard earned money over to crypto investments or accepting crypto directly in exchange for goods is a positive sum activity and nothing akin to sponsoring global illicit activity.

So how best to achieve this if not through the mass deployment of technological buzzwords to disguise what are in fact well-established financial mechanisms and processes as something cutting edge and new? By this process, basic spread-betting platforms and OTC derivatives systems can be reimagined as “tokenised investments“, offering value-creating opportunities as opposed to zero-sum gambling traps to the financially illiterate.

And if that were the case, you’d hope the world’s media would be on the case to expose what’s really going on....MUCH MORE
That was the FT's Izabella Kaminska who, unless I'm missing something, just nonchalantly threw down a challenge to the powers-that-be that they won't be able to ignore.