IRS: “NFTs & Crypto Are the Future; for Fraud and Manipulation As Well”
With the Securities and Exchange Commission (SEC) looking to regulate cryptocurrencies and digital assets and now the Internal Revenue Service’s Criminal Investigation branch openly stating their fear of virtual currency’s use, it seems like the world of crypto might be witnessing some unfavorable moves from the government agencies.
IRS After Crypto and NFTs
As reported by Bloomberg, at a virtual event held on Tuesday by the USC Gould School of Law, Ryan Korner, IRS’ Criminal Investigation’s Los Angeles field office’s Special Agent said:
“We’re (the division) just seeing mountains and mountains of fraud in this area”.
The IRS CI division has been looking into the growth of crypto products and their usage not limited to payments and trading. The division stated that they see cryptocurrencies and NFTs being used for fraud, tax evasion, and even money laundering.
Furthermore, the increased involvement of celebrities in the crypto world has worried them further as these celebrities act as a direct link for a mainstream audience to crypto. And there is a fair chance that the unaware celebrities could be promoting a scam.
Just recently the likes of Kim Kardashian, Floyd Mayweather, and Paul Pierce were sued for participating in a pump and dump scheme called EtheruemMax which lost over 97% of its value in hours.
IRS CI also said that these cryptocurrencies can be easily manipulated by a powerful investor at the ease of a simple tweet. Although they didn’t care to mention the market’s volatility, that serves as an equally grave concern.
An example of this is the case of NFL star Odell Beckham Jr who received his $750k salary in BTC last November and lost over 61% of its value by today. Adding on to his troubles is the state’s 50% taxing regulation which brought his total salary down to just $35,000.
But this isn’t where the IRS stopped.
The Future From the Eyes of IRS
During the event, Korner also said that the division is training its agents on crypto and NFTs as he thinks that “this space is the future”.
On the topic of NFTs Korner said that NFTs don’t seem to have any inherent value and IRS CI fears that these million dollars worth of NFTs could be used as a means of criminal transactions.
Presently NFTs are a $17 billion market growing every day and although the crypto market may not be at its best presently owing to the recent market crash, it still holds over $1.72 trillion in investments.
Korner further said that going forward IRS CI would collaborate with other federal agencies as well to prevent criminal activities as much as possible.