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IRS Special Agent “Seeing ‘Mountains Of Fraud in Cryptocurrencies, NFTs”

ComplianceX | Jack Kelly | Jan 31, 2022

hacker fraudster - IRS Special Agent "Seeing ‘Mountains Of Fraud in Cryptocurrencies, NFTs"Speaking at a virtual event held on Tuesday by the USC Gould School of Law, Ryan Korner from the IRS Criminal Investigation’s Los Angeles field, said that both NFTs and cryptocurrencies are becoming a growing area of concern for regulators and tax collectors as they’ve steadily become more mainstream.

Korner said, according to Bloomberg:

“We’re just seeing mountains and mountains of fraud in this area”

Due to their rising popularity, regulators are struggling to police how the tokens are used and prevent them from being utilized for criminal activity such as fraud, money laundering, market manipulation, and tax evasion.

In December, former First Lady Melania Trump released her first NFT and launched a new platform that will release NFTs regularly, called “Melania’s Vision.”

See:  NFT Marketplace exploit leads to catastrophic losses for some collectors

Including award-winning director Quentin Tarantino and electronic music artist Deadmau5.

The IRS Criminal Investigation Unit seized $3.5 billion in cryptocurrency during fiscal year 2021, which accounted for 93 percent of its criminal investigation seizures, according to the agency’s annual criminal investigation report published in November (pdf).

Korner said the unit ended the year with active 80 cases in its inventory where the primary violation was tied to cryptocurrencies, and that the unit is working to train all of its staff on the issues surrounding cryptocurrencies and NFTs, acknowledging that “this space is the future.

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