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Wednesday, August 10, 2022

IRS Chief considers NFTs mountains of fraud while Facebook, Twitter open doors to it

  • Top special agent in the IRS reveals that manipulation and fraud is rampant in NFTs and crypto. 
  • Meta’s social media platform Facebook, and Twitter, recently opened doors to NFTs.
  • Cryptocurrencies accounted for 93% of all assets seized by the IRS in 2021. 
  • IRS agents are actively training on crypto and NFT regulation to stay ahead of criminals. 

Special agents at the IRS believe that NFTs and cryptocurrencies are rife with manipulation and fraud. Twitter recently opened doors to NFTs, allowing users to display their digital art and collectibles as profile pictures. 

IRS special agents believe crypto and NFT fraud is endemic 

A special agent from the Internal Revenue Service said in a virtual event that cryptocurrencies and NFTs are the future; however, manipulation and fraud is rampant. Ryan Korner, IRS Criminal Investigation, was quoted by Bloomberg, 

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

The IRS has noted massive growth in cryptocurrencies and NFTs. Digital currencies have been used for manipulation, fraud and tax evasion, among other illicit behaviors. Agents are being trained in cryptocurrencies to stay ahead of criminals. 

Cryptocurrencies and NFTs have been a cause of concern for regulators and government agencies for the past few years. 

Based on IRS investigations – of all assets seized by the agency in 2021, cryptocurrencies accounted for 93%. Interestingly, social media platforms Facebook and Twitter recently opened doors to NFTs. 

In 2021 alone, the IRS had 80 cases where cryptocurrency was primarily involved. 

Proponents believe that Facebook has plans to launch its NFT marketplace in the near future. 

Korner believes that high-profile investors have the ability to sway prices with a tweet, further fueling the narrative of manipulation associated with crypto. 

The IRS is keen on increasing collaboration across regulators and federal agencies to stay ahead of crime and manipulation in cryptocurrencies and NFTs. 

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