Why does Griffin love art?
Bank of America is Citadel's Prime Broker, and Bank of America is the largest art lender: https://www.privatebank.bankofamerica.com/insights/art.html
From PrivateArtInvestor
A good year for his bank, Bank of America, is “$1bn or $2bn in art loans” and he is privy to the true value of the art that changes hands – in and outside the world’s auction rooms.
And
Of the four-core services BOA, its most successful is the art lending service: “The largest lender of art in the world,” he added.
On specifics of how this works, from theartnewspaper:
Borrowing against one’s art collection is now commonplace in the private banking divisions of financial institutions such as Goldman Sachs, Bank of America, Citibank, Deutsche Bank, Emigrant, HSBC and JP Morgan Chase, where the collateral for the loan is the art itself. Most of the banks that make such loans allow borrowers to retain possession of their art, though that—as well as the rate of interest (2.5%-5.5% is the average range), the loan-to-value percentage (35%-50% on average), the amount and term (usually a minimum of six to 12 months) of the loan—is negotiated.
So we know Griffin can likely monetize fine art at any time, while still maintaining physical custody of the pieces. This allows him to use this art as financial tokens.
Combine this knowledge with an understanding of Freeport abuse, from secretsofartmagazine:
The purpose of a freeport warehouse is to make it possible to store works of art, items from collections, antiques and jewellery without incurring duties and taxes. In short, a freeport is a storage facility that exists formally outside of the territorial jurisdiction of any country.
This means...
The freeport warehouse makes it possible to store or sell works of arts without incurring duties and taxes. Most of the freeports are located in a strategical place, close to important international airports, helping the transportation of the assets between the other freeports.
And it gets worse...
What makes a freeport truly exceptional and attractive to the art collectors is the fact that the contents of freeports are invisible to tax authorities and foreign governments. Complete anonymity is guaranteed and art collections in freeports cannot be traced to the original owners and no government can tax these assets.
Per New York Times reporting, we know that banks can/will use art located in freeports as collateral for loans:
Case in point: $28 million worth of works by Andy Warhol, Jeff Koons, Joan Miró and others now stored in the Geneva Free Port. Equalia, a company registered by Mossack Fonseca (the law firm at the center of the Panama Papers controversy about how the wealthy conceal their riches), stored the works on behalf of a diamond broker, Erez Daleyot, in 2009. Once in storage, the art was used as collateral for debts Mr. Daleyot owed to a Belgian bank, according to court papers.
Of course, the banks opinion...
The bank, KBC, said it had kept the art in the free port “out of precaution” and that it could not comment further on a matter involving one of its clients.
With these pieces laid out, the puzzle becomes clear. Fine Art valuations have exploded over the past decade. Bank of America has dominated the industry, even becoming their most successful core business. One hand washes the other. Griffin can launder money with ease by abusing freeports to move funds, even with illegal contacts (Russia, China, politicians, terrorists, criminals, ect). Griffin likely has a Synthetic Prime Broker relationship with BoA (similar to the one Archegos had in place with CS) which allows him to fund stock moves using his fine art as collateral, but avoiding any sort of reporting.
Eng
中文