Tax Investigators Identify Potential $1 Billion Crypto Ponzi Scheme – identified by US and UK officials

More than 50 potential tax crimes have been identified by international tax officials. Official investigations could begin in the next few weeks.

  • More than 50 criminal leads were identified by US and UK officials
  • An announcement about an investigation could be made as soon as this month

The J5 group, which includes top officials in criminal tax and financial crime from the UK, USA, Canada, Australia, Australia, and the Netherlands, met this week in London to exchange intelligence and data to find cross-border sources of illegal crypto activity. They were particularly focused on emerging trends in decentralized finance, nonfungible tokens (or NFTs), and other issues.

Jim Lee, chief of criminal investigations for the Internal Revenue Service, stated that some of the leads he’s talking about involve people with significant NFT transactions that revolve around potential tax or financial crimes within our jurisdictions. One lead appears to be a Ponzi Scheme worth $1 billion. This lead touches every J5 country and is worth billions with a B.

This initiative highlights the increasing scrutiny of fraud, risks and malfeasance within the rapidly growing crypto industry. Janet Yellen, US Treasury Secretary, told lawmakers that Thursday’s meltdown of TerraUSD stablecoin was a reminder of the need for new regulations.

Lee stated that J5 tax officials also identified leads in relation to decentralized exchanges, financial-technology companies and other entities. He said that announcements about “significant targets” could come as early as this month. Officials declined to provide further details about the leads as they have not been officially charged or are currently under active investigation.

In a turbulent week for crypto markets, the identification of possible crimes is more bad news. According to some estimates, large price fluctuations have roiled crypto markets. They also depressed total crypto asset values by around $270 billion.

Crypto transactions are now possible to cross international borders with ease. This has led to closer cooperation between countries that have had difficulty keeping up with the rapid technological changes in recent years. The IRS has made crypto one of its top enforcement priorities, domestically as well as internationally.

Niels Obbink of the Dutch Fiscal Information and Investigation Service stated that NFTs were “one of the modern digital ways of trade-based money laundering,” he said. It is important to pay attention to it because it has — in comparison with other well-known sectors — less control, less supervision, and a limited regulation that makes them vulnerable to fraud.

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