Global Tax Enforcement Group Provides NFT Red Flag Guidance

Key Takeaways

  • The Joint Chiefs of Global Tax Enforcement (J5) issued its first intelligence bulletin providing guidance to banks, law enforcement partners and private investigators regarding indicators of potential misconduct related to non-fungible tokens (NFTs).
  • The J5 report on NFTs and the U.S. Department of the Treasury’s February study underscore the time and attention that regulatory agencies are dedicating to NFTs and the potential fraud risks that market participants face.
  • NFT market participants should know what to ask of potential partners and clients by implementing comprehensive compliance programs to comply with anti-money laundering and know-your-customer requirements and securities, commodities and tax rules and regulations.

Answering the call for guidance regarding potential issues concerning the popular cryptocurrency assets NFTs, on April 28, the J5 issued a first-of-its-kind intelligence bulletin warning the public of the dangers of dealing with NFTs. Titled the “J5 NFT Marketplace Red Flag Indicators,” the bulletin provides real-world guidance to banks, law enforcement partners and private investigators intended to help improve their fraud detection measures. The guidance is based on information obtained by members of the global task force and shared as part of its mission to prevent tax evasion. “This space is changing so fast, and technologies and products have the ability to become the ‘next big thing’ without any due diligence or regulation on the part of the creator of the product,” says Special Agent Oleg Pobereyko, J5 Crypto Group lead. “We tried to put together a product that would help keep people safe while law enforcement catches up to these particular concerns.” The J5 report on NFTs follows a study published by the Treasury Department in February highlighting the use of the NFT marketplace to facilitate money laundering and terrorist financing, underscoring the time and attention that regulatory agencies are…

Read more at www.lexology.com

Leave a Reply

Your email address will not be published.


*