In 2023, a single painting sold for over $150 million. No one knows exactly who bought it, where the money came from, or even where the artwork is now. That level of mystery is not an exception in the art world. It’s the rule. The international art market has become one of the least regulated, most opaque financial systems in the world. For the ultra-wealthy, it’s more than a playground. It’s a tool.

Art isn’t just about culture or creativity. Increasingly, it’s being used as a highly effective way to move and hide massive amounts of money. And surprisingly, a lot of this behavior is completely legal.

Art is unique. A single object can be worth millions, yet it takes up almost no space. It can be shipped across borders quietly, with no questions asked. Sales can happen privately, with no oversight, no reporting requirements, and often no paper trail. The art world thrives on secrecy, and that secrecy is what makes it so attractive to billionaires.

Unlike real estate or traditional investments, there are no formal databases for art ownership. In most countries, you’re not required to register a sale or reveal who’s involved in a transaction. You can buy a painting through a trust or shell company, store it in a private warehouse, and no one would know you even own it.

Here’s where things get interesting. Many of these practices fall into legal gray areas. A collector can purchase a piece through an anonymous auction, using an LLC registered in a tax haven. The artwork can then be stored in a “freeport” — a duty-free zone that allows goods to sit indefinitely without being taxed or reported. Geneva has one of the most famous freeports in the world. Inside are thousands of priceless works of art that may never be seen by the public.

On paper, there’s nothing illegal about this. But it creates the perfect environment for hiding wealth, avoiding taxes, or moving money between countries without drawing attention.

Even art donations can be used strategically. A billionaire can donate an artwork to a museum, write off the appraised value on their taxes, and still maintain effective control over when and how the piece is displayed. The valuation process is subjective, and often there’s little oversight. It’s an elegant way to convert a volatile asset into a public relations win — and a hefty tax break.

Scandals in the art world have been making headlines for years. Dealers like Inigo Philbrick were exposed for selling the same work to multiple investors, inflating prices and creating fake provenance documents. Russian oligarchs and Chinese elites have also used art to move assets discreetly in and out of Western markets.

The problem is not isolated to a few bad actors. The structure of the market itself invites manipulation.

So why hasn’t this been shut down? Partly because the art market is notoriously difficult to regulate. It’s international, decentralized, and highly resistant to transparency. Galleries, collectors, and major auction houses have little incentive to push for reforms. Many of them benefit from the current system.

Attempts at regulation do exist. The European Union has introduced new anti-money laundering rules that target art transactions over a certain threshold. In the United States, the Treasury Department has begun reviewing the risks associated with high-value art sales. But enforcement remains limited, and the global nature of the market makes meaningful oversight challenging.

Calls for reform are growing louder. Financial watchdogs and investigative journalists continue to expose the darker corners of the art world. Some industry insiders are beginning to support changes — especially as public scrutiny increases.

Still, the basic mechanics haven’t changed. Art remains one of the most efficient and discreet ways for the ultra-rich to move and shield their wealth.

To most people, a painting is a cultural object. To the world’s wealthiest collectors, it’s something more. It’s a financial asset, a bargaining chip, a status symbol, and in many cases, a shield. The art market wasn’t built to handle this kind of pressure. But as long as the laws remain vague and the profits remain enormous, the game will continue.

References

Deloitte Luxembourg. AML for the Art and Finance Industry. Deloitte Luxembourg, Jan. 2020.

DLA Piper. Money Laundering in Trading Works of Art – US Treasury Report. DLA Piper, Mar. 2022.

Erskine, Matthew. “The Center for Art Law Report on Anti‑Money Laundering and Art.” Forbes, 4 Dec. 2023.

European Commission. “Anti‑Money Laundering and Countering the Financing of Terrorism at EU Level.” European Commission, finance.ec.europa.eu. Accessed 9 May 2025.