Tax authorities of several countries have warned about the dangers of NFTs and cryptocurrencies

Published: 29.04.2022

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1 min.

The J5 consortium, which includes the tax authorities of the US, Australia, UK, the Netherlands and Canada, issued a warning about the risks of using NFTs for criminal purposes.

The Joint Chiefs of Global Tax Enforcement (J5) statement details the signs of non-fungible tokens (NFTs) and cryptocurrencies being used for fraud and money laundering. If such signs are found by banks and law enforcement agencies, it is necessary to pay close attention to the participants in the transaction, check transactions and sources of funds.

Will Day, head of J5 and Deputy Commissioner of the Australian Inland Revenue, said the consortium plans to issue many more such documents in the future. The new guidelines will better combat tax crimes and money laundering through digital assets.

“Most cryptocurrency holders and NFT buyers do this perfectly legitimately. But criminals are constantly looking for opportunities and ways to use new technologies for their activities. Cryptocurrencies and NFTs are not immune to this,” the statement emphasizes.

One of the “red flags” for banks and law enforcement should be “networks” of cryptocurrency addresses that constantly exchange cryptocurrencies and NFTs among themselves. The sale of expensive NFTs for small amounts also looks suspicious. It is also important to keep an eye on tokens that are too expensive or too cheap and are constantly moving between addresses.

Recently, the International Monetary Fund (IMF) once again expressed concerns about the use of cryptocurrencies by Russians to circumvent sanctions.