The Joint Leaders for Global Tax Enforcement (J5), a global tax-anti-fraud group, hosted investigators, cryptocurrency experts and data scientists in “The Cyber Challenge”. The main objective was to track tax evading individuals and companies.
The J5 members consist of the criminal intelligence communities of Australia, Canada, the Netherlands, the United Kingdom and the United States, who work together in the fight against international and transnational tax crimes and money laundering.
The team includes the Australian Taxation Office, the Canada Revenue Agency, the Dutch Tax Information and Intelligence Service, Her Majesty’s Revenue and the United Kingdom and United States Revenue Service. The event brought together experts from the J5 countries who worked to improve the use of data obtained from various open sources available in each country.
Since its formation in 2018, J5 has organized five such events. In 2022, the fourth event focused on non-fungible tokens (NFTs) and decentralized exchanges (DEX). Sharing details about the 2023 version, the IRS report declared:
“This is the first challenge in which each J5 country’s Financial Intelligence Units (FIUs) participated. The private sector was represented by blockchain analytics firms Chainalysis, BlockTrace and AnChain, making it the most collaborative challenge to date.”
In the process, J5 generated significant clues for further investigation. In the past, J5 meetings have contributed to uncovering multi-million dollar cryptocurrency Ponzi schemes like BitClub Network. Australian Taxation Office Deputy Commissioner John Ford said:
“This collaboration between public and private experts not only drives operational outcomes, but also develops the specialized training guidelines, techniques and procedures that participants need to be active and effective in a rapidly evolving operational environment.”
Ryan Ryder of Chainalysis notes that transparency in cryptocurrencies, along with the efforts of public and private sector professionals, can “collaborate to detect and derail regulatory actions” involving cryptocurrencies, a task that cannot be achieved in a traditional financial environment.
oh Cointelegraph Innovation Circle Web3 recently asked seven cryptocurrency experts for an article to help companies prepare for tax season. First, Web3 companies must continue to monitor the tax implications of their activities and exercise due diligence to ensure they meet their obligations.
Additionally, members of the Cointelegraph Innovation Circle recommended seven practices to ensure compliance with tax regulations. Choosing a country with favorable taxation and ensuring timely payments are top priorities, as well as avoiding shortcuts and finding an accountant experienced in cryptocurrency taxation.
Other important factors include recording and accurately documenting all transactions, obtaining expert legal advice, automating transaction monitoring, and using specialized software.
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