Recent months have been challenging for crypto investors because of the radical shift in market prices, assets collapsing, and other diverse economic challenges. To put it in better perspective, the value of the flagship asset in the crypto market has been declining since November 2021 including other assets that are also considered safe and secure for investment because they are regulated by different exchanges or were pegged to the US dollar.
Proponents of the crypto space have applauded the efforts of the national and international authorities in ensuring the viability of the sector.
However, what contributes to the growth of the market is the invasion of Ukraine by Russia which further proves the utility of the sector since a large number of users now depend on cryptocurrencies for fund transfers.
Despite this shining moment, it is evident that the crypto market is at a critical junction given that the market value of the space has reduced by about 50% since November and it is also vulnerable and susceptible to manipulations, sudden price falls, and frauds.
Crypto Regulators Actively Tracking and Investigating a Fraud in the Space
There are at least 50 alleged tax offenses under investigation by international tax inspectors. These investigations have uncovered fraud which includes a potential Ponzi scheme worth a billion dollars.
According to a report published on Friday, the heads of tax enforcement of the Joint Chiefs of Global Tax Enforcement representing the J5 countries held a meeting in London where they shared intelligence on how to uncover the sources of illicit activities across their borders. On the same day, the chief of criminal investigations of the Internal Revenue Service, Jim Lee, stated that the team has led some individuals that engaged in NFT transactions that involved come a level of tax or other financial crimes through the J5 jurisdictions.
From the statement, the money involved in the crime affects investors from different parts of the world including crypto investors from Canada, the United Kingdom, the United States, Australia, and the Netherlands. According to Lee, “it is looking like a Ponzi scheme and it is worth about $1 billion. Yes, B for Billion, and this lead cut across all the J5 nations.”
The J5 Program
The J5 program was founded to fight tax crime and it comprises governments from five different countries. It was founded in response to the call from the OECD – Organization for Economic Cooperation and Development for countries to fight facilitators of tax crimes in their countries.
Recently, the program has been focusing on examining the potential frauds and hazards in the crypto space. This shows how the government is working to ensure the safety of investors in the crypto space. for instance, on Monday last week, the Treasury Secretary of the United States filed a report for the legislators on the collapse of the Terra ecosystem and how it calls for more law enforcement.