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Crypto traders evading taxes will be hunted down by a new team of investigators. Per a report from The Sydney Herald, money laundering investigators from the world’s largest economies have been given the mandate to track down traders avoiding tax payments using dubious schemes.
The group has since been dubbed J5, which stands for an alliance of Joint Chiefs of Global Tax Enforcement.
It features tax authorities from the United States, U.K., Canada, Australia, and the Netherlands, who have come together to work on information sharing, with cryptocurrency high on the agenda. Since it was formed last July, the J5 has grown thanks to its ability to share information between member countries.
Per the report, the J5 reportedly has 60 open investigations with at least one being a probe into a “global financial institution” and its intermediaries.
The unnamed institution is being investigated on allegations of helping taxpayers hide crypto income from the authorities. According to the report, the team is opening an additional 50 inquiries globally, as it seems that more fraudulent tax avoiders are being discovered.
Crypto Tax Issues in Australia
Australian Taxation Office (ATO) deputy commissioner Will Day believes that the the reason why tax evasion crimes are now commonplace is due to the growth of the crypto sector.
He explains:
“We’re seeing the use of cryptocurrencies in ways that we haven’t seen before. At the Australian level, there is definitely legitimate use for investment in cryptocurrencies, but we’re also seeing the use of them to facilitate tax crimes.”
Proportionally, the growth of the cryptocurrency sector has led to government regulations, infractions and strict tariffs in a bid to control the market and ensure safe procedures for exchange trades. Australia is ranked as 14th globally for Bitcoin (BTC) volume by currency. Due to the fact that the digital currency sector has undeniably become a revenue-generating part of the economy, tax laws and policies have also beared down on them.
Read: Should you Invest in Bitcoin?
New Crypto Rules in Australia
Back in April, the Australian government, through the Australian Transaction Reports and Analysis Centre (AUSTRAC), announced plans to implement new rules on cryptocurrency exchanges.
The regulations included rules for all digital currency exchanges (DCE), with business operations located in Australia to register with AUSTRAC and meet the Government’s AML/CTF [Anti-Money Laundering/Counter-Terrorism Financing] compliance and reporting obligations.
These tax laws have seen crypto traders masking their business and profits, or disclosing reduced numbers to avoid paying huge sums as tax because of their equally huge profits from digital currency trading.
Hitherto, the J5 coalition is a strong effort towards curbing money-laundering and tax crimes, a measure that is helped by the fact that information among the J5 is now being shared in a “more organised” manner, including through a computer network that enables the agencies to compare, analyse and exchange data anonymously.
In practice, the J5 will pretty much work like the IRS. Back when the U.S. agency wanted to uncover Americans with foreign accounts who were avoiding tax compliance, it used a cunning mix of justice and mercy to convince perpetrators.
Their efforts seem to have paid off, as last month, The Dutch police averted a dodgy cryptocurrency “mixing service” dubbed Bestmixer.io, which was used to hide the ownership history of over $200 million worth of Bitcoin in just one year. All related data has since been shared between J5 members.
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Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:- Breaking market-moving stories before they hit mainstream media
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- Expert trade ideas and on-demand support
