Out of all the ways NFTs have crossed into the physical world, the area of property seizure and forfeiture of rights is probably not the physical manifestations we were hoping for. However, that’s exactly what happened to prominent generative art creator Ilja Borisovs, better known as Shvembldr. Let’s dive into his story, highlight the facts, and bring attention to exactly what is going on in Latvia.
Shvembldr’s journey as a generative artist began at the end of 2018. Drawing inspiration from artists such as Mando Gamboa and Joshusa Davis, Shvembldr plunged headfirst into the world of generative art. During this time, he continued to network with different artists while honing his craft and experimenting with different programs and mediums.
It may seem odd at first glance, but Shvembldr actually didn’t start his journey in NFTs until recently. The initial wave of popularity in the NFT space at the end of 2020 was off-putting to Shvembldr. He recalled million dollar sales for celebrity tweets and the mainstream criticisms against NFTs.
It wasn’t until later in March 2021 that Shvembldr saw more and more artists creating art and experiencing success in the space that he started to pay more attention. He first started experimenting with hicetnunc.xyz and minted two pieces of art, one of which you can see below:
Later on, hicetnunc.xyz allowed artists to create art with code which gave Shvembldr the opportunity to create his first live piece entitled ɳσƚ Ⴆɾιʅʅιαɳƚ. Within the first 24 hours of the piece being listed, it sold, and Shvembldr never looked back.
Over the course of the next months, Shvembldr started participating more within the space and launched several collections including:
- The Blocks of Art
- Alien Clock
- Alien Insects
- Aixxa, and
- Alien DNA
Throughout 2021, Shvembldr released 3,557 different NFTs and withdrew a profit of 8.7 million Euro of which he owed roughly 3.1 million Euro in taxes.
Things Took a Turn
According to Shvembldr, he had always kept the lines of communication open with his bank and any state authority that had questions about his work.
Before making his first large withdrawal from Coinbase, he contacted SEB (his bank) in order to to ensure he was following the correct procedures. He transferred 30,000 Euro to his account and receive a Source of Funds letter from SEB. In response, Shvembldr sent the bank his artist history, his social networks and payment data as well as his statements from Coinbase. After a few days of correspondence with SEB, his account was unblocked.
This pattern continued, and a second block was enacted, compelling Shvembldr to go through and pass a verification check once again. By this time, he had already transferred 8.7 Million Euro to his bank account.
At the beginning of October 2021, Shvembldr was informed that the Latvian State Security Service had reached out to his former employer inquiring about him. Shvembldr proactively reached out to them and went in for an interview. During the interview, which the Latvian officials said was not an interrogation, they asked questions about Shvembldr’s artistic roots, the way he manages his business, and what he plans to do with the money he receives from his work. In his view, the interview was entirely amicable, and that was the last he expected to hear anything on the matter.
The Hammer Drops
On February 14 2022, Shvembldr was in the process of purchasing music production software when all of a sudden, his card was declined. He was later informed that the Latvian police had blocked his account. This was actually an investigation initiated by the Latvian Police’s Organized Crime Unit on February 3 2021. After obtaining his case number from SEB and finding the name of the investigator, he received radio silence: absolutely nothing for the next 3 months.
After hiring a lawyer, Shvembldr was able to make more sense of what was occurring in his case. On June 30 2022, he had his first major breakthrough in the case where the court ruled on the illegality relating to the manner in which his accounts were frozen/seized. This, however, wouldn’t last. The head of the Organized Crime Unit would create a new arrest order and have it signed by the prosecutor’s office. Shvembldr’s funds were seized once again.
To this date, Shvembldr had sent all documents proving the legality of the funds and the way in which they were obtained. His income data that he provides on his own website is well documented and verifiable on the blockchain. Currently, Shvembldr is awaiting a decision from the district court after sending all the necessary documents relating to his funds.
Smoke and Mirrors
Often the modernity of a country provides a veil and makes it appear that the rule of law prevails, but in practice, we see totally different outcomes. Latvia functions as a Parliamentary Republic which, constitutionally, should function as a representative democracy. The country has an executive, judicial, and legislative branch that can only be described as somewhat shaky.
Amnesty International described Latvia as an incubator for greater inequality and instability in 2021.
It’s no surprise that the same difficulties being encountered by Shvembldr are commonplace in Latvia’s court system.
The argument at the heart of the Latvian Police’s Organized Crime Unit is that Shvembldr used “computer systems in order to carry out a scam of illicit transactions.” In reality, he created art and sold them on various platforms and did not break any platform rules in the selling of his art. He made every attempt possible to legalize his income, provide supporting documentation, and prove the validity of the source of funds. There will come a time when the courts will be unable to claim ignorance. It’s all there, in black and white, on the blockchain.
As Shvembldr himself states:
Most artists have failed to make their profession their primary source of income for centuries. But blockchain has allowed artists to control the distribution of their art and earn as the value of their art grows. Unfortunately, there will always be people who want to stand in the way of progress and are ready to stifle all good initiatives. I hope my story helps change that.
The opportunities blockchain technology has provided to artists cannot be understated. It is evident that fairer systems have been created in the last few years that have upended the traditional way artists have been able to make money. Shvembldr’s success is only one of many. For his sake, and for the rest of the artists working in this field, we hope he finds a fair and speedy resolution to his predicament.
To learn more about Shvembldr’s story, visit his website .