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Crypto's latest trouble: global Ponzi scheme under IRS-CI+ investigation


Crypto currency aficionados thought the worse thing happening to their holdings lately was the crashing market prices. Sorry. There's more.

Tax investigators say they've discovered a possible $1 billion Ponzi scheme focusing on the crypto market.

More than 50 potential crypto tax offences have been uncovered by international tax inspectors, according to reports out of a recent London conference of leaders of the Joint Chiefs of Global Tax Enforcement (J5) countries.

The J5 was created to fight transnational tax crime through increased enforcement collaboration. The participating tax agencies — the Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), France's Fiscale Inlichtingen- en Opsporingsdienst (FIOD), the United Kingdom's HM Revenue & Customs (HMRC), and the U.S. Internal Revenue Service Criminal Investigation (IRS-CI) — collaborate in the gathering of tax crime information, sharing of intelligence, and conducting operations identify and prosecute cross-border perpetrators.


"Some of these leads concern individuals with substantial NFT [Non-Fungible Tokens] transactions involving potential tax or other financial crimes throughout our jurisdictions," said Jim Lee, chief of IRS-CI.

Of the 50 separate leads into scams that the JF is examining, Lee said, "It looks that [one] is a $1 billion Ponzi scheme. That's billion with a 'B,' and this lead affects each and every J5 nation."

The crypto Ponzi scheme report comes on the heels of Treasury Secretary Janet Yellen's testimony before the House Committee on Financial Services, in which she said the collapse of the TerraUSD stablecoin demonstrates the need for additional laws.

Also last week, the Federal Bureau of Investigation (FBI) arrested the CEO of New York crypto trading platform EminiFX. He is charged, per court documents, with one count of commodities fraud and one count of wire fraud related to an alleged Ponzi scheme that allegedly defrauded investors out of about $59 million.

So, crypto owners, in addition to watching the markets, and making sure you follow Internal Revenue Service rules about taxable virtual currency transactions, be on the lookout for crypto deals that seem, even in the crypto world, too good to be true.

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