Global Tax Enforcement Chiefs Found Leads To Potential $1 Billion Crypto Ponzi Scheme

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J5 Joint Chiefs of Global Tax Enforcement Found Leads to $1 Billion Crypto Ponzi scheme
Image Credit: Canada Revenue Agency via Twitter

The Joint Chiefs of Global Tax Enforcement (known as the J5) found more than 50 leads to potential financial crimes including a possible $1 billion cryptocurrency Ponzi scheme.

The J5 is composed of the Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), the HM Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

This week, the J5 tax enforcement chiefs held a summit in London.  Investigators, experts, data scientists, and others were part of the meeting. They shared intelligence, analyzed data on real leads to investigate, and coordinated efforts to combat tax crimes and money laundering.

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Tax Enforcement Chiefs are focused on leads involving DEXs and NFTs

The J5 chiefs are currently focused on leads pointing to illegal activities related to non-fungible tokens (NFTs) and decentralized exchanges (also known as DEXs).

DEXs are peer-to-peer marketplaces used by traders to buy and sell cryptocurrencies.  Crypto traders execute their transactions through the DEXs using self-executing agreements called smart contracts that are written in codes. Traders execute their transactions directly on DEXs without an intermediary to manage their funds. There are no regulators to oversee their cryptocurrency transactions.

“Some of these leads I’m talking about, they involve individuals with significant NFT transactions revolving around potential tax or other financial crimes throughout our jurisdictions,” said IRS-CI Chief Jim Lee as quoted by Bloomberg on Friday.

Lee added that one of their leads “appears to be a $1 billion Ponzi scheme. That’s billion with a B and this lead also touches every single J5 country.”

Furthermore, Lee said they have leads involving DEXs and financial technology (Fintech) companies. The J5 tax enforcement chiefs are expected to announce “significant targets” of investigations this month.

On the other hand, the Chief and General Director of the Dutch Fiscal Information and Investigation Service Niels Obbink said, “NFTs are one of the new modern digital ways of trade-based money laundering. And since there is — comparing with more well-known classic sectors — less control and less supervision and a limited regulation that makes it vulnerable for fraud, it must have our attention.”

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