US Internal Revenue Service investigators said that non-fungible tokens are “ripe” for use in illegal activities, and celebrities are contributing to this by promoting them.
The Criminal Investigation Division of the Internal Revenue Service (IRS) reported that NFTs have become frequently used in fraudulent schemes, as well as for money laundering and tax evasion. Special Agent Ryan Korner said law enforcement cannot stand watching people pay millions of dollars for NFTs that have no intrinsic value. He is concerned that many celebrities are increasingly showing interest in the world of cryptocurrencies, acting as a “link” between digital assets and their audience. Moreover, with a high degree of probability, they may not even suspect that they are promoting fraudulent projects.
This month, an aggrieved investor sued actress Kim Kardashian, boxer Floyd Mayweather, and former basketball star Paul Pierce for promoting the Ethereum Max cryptocurrency project. Korner noted that any influencers can easily manipulate cryptocurrencies with a simple tweet, and this is of great concern to regulators. In September, the IRS announced that it seized $1.2 billion in 2021 from illegal activities using crypto assets.
“We have already encountered a huge number of fraudulent cases where cryptocurrencies were involved. And even authorities are not immune from criminal investigations. By openly encouraging people to invest in dubious projects, they thereby attract the attention of regulators and investigating authorities, as if calling: “Hey, tax officials, look at me!”, Which is what we are doing, ”said Korner.
Recently, the agency stated that despite the lack of clear rules on the taxation of NFTs, owners of collectible tokens are required to pay income tax. However, according to the IRS, they evade billions of dollars in taxes.
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