• Five countries’ cryptocurrency regulators have identified a potential $1 billion Ponzi scheme

  • Investing in cryptocurrencies has been difficult in recent months. The emerging market has been jolted by wildly fluctuating prices, plummeting assets, and a slew of economic issues.

    Since November, as the price of bitcoin, the world’s most popular cryptocurrency, has fallen, so have the values of currencies that were formerly thought to be safe and secure because they were pegged to the US dollar and regulated by exchanges.

    Proponents of digital assets praised international and national authorities for their efforts to better understand and monitor the sector’s viability.

    The reckless Russian invasion of Ukraine also contributed to the development. A big number of people used cryptocurrencies to transfer payments within and outside of the country, confirming the currency’s utility yet again.

    Regardless of its bright spots, cryptocurrency is currently at a crossroads.

    It has lost over half of its market value since November and is vulnerable to fraud, manipulation, and unexpected drops.

    Tax Investigators on the Lookout for Major Fraud

    Regulators are now looking into another another fraud.

    International tax investigators have discovered more than 50 potential crypto tax offenses, which may pave the path for an official investigation in the coming weeks – including a potentially $1 billion Ponzi scam.

    According to reports issued on Friday, the heads of tax enforcement from the Joint Chiefs of Global Tax Enforcement (J5) countries met this week in London to share intelligence and data in order to identify sources of illegal cross-border activities.

    “Some of these leads include individuals with major NFT transactions involving potential tax or other financial crimes throughout our jurisdictions,” said Jim Lee, the Internal Revenue Service’s chief of criminal investigations, on Friday.

    The money appears to have affected investors all around the world, including cryptocurrency buyers in Australia, Canada, the United States, the United Kingdom, and the Netherlands.

    “It looks that [one] is a $1 billion Ponzi scheme. “That’s billion with a ‘B,’ and this lead affects every J5 nation,” Lee pointed out.

    The J5 is a tax-crime-fighting effort comprising five governments.

    The curriculum focuses a more thorough evaluation of risks, fraud, and misconduct in the developing cryptocurrency industry.

    Last Monday, US Treasury Secretary Janet Yellen told lawmakers that the failure of the TerraUSD stablecoin illustrates the need for new legislation.

    Crypto Crime Enablers vs. J5

    The J5 was formed in response to the OECD’s (Organization for Economic Cooperation and Development) appeal for governments to do more to combat tax evasion facilitators.

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

    According to Niels Obbink of the Dutch Fiscal Information and Investigation Service, “NFTs are one of the developing digital ways of trade-based money laundering.”

    The identification of suspected criminals is perhaps more negative news in an already difficult week for Bitcoin markets.

    Large price volatility, according to some estimates, roiled crypto markets and reduced total asset valuations by about $270 billion.

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