The Joint Chiefs of Global Tax Enforcement has issued a bulletin to warn financial institutions, law enforcement employees and citizens of risks associated with non-fungible tokens.
The J5 NFT Marketplace Red Flag Indicators document also lists several best practices adopted by J5 countries when it comes to NFTs, the Internal Revenue Service said Thursday.
“This paper provides a suite of indicators that financial institutions can reference to help them identify illicit financial activity concerning NFTs. It’s intended to be the first of many that can be used by financial institutions to assist in the fight against tax crime and money laundering involving virtual assets,” said Will Day, chief of J5 and deputy commissioner at the Australian Taxation Office.
“This report is a unique and progressive initiative and the J5 looks forward to working closer with the virtual assets industry to meet the rapidly evolving and highly complex environment which we share,” added Day.