A coalition of criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom, and the United States called the Joint Chiefs of Global Tax Enforcement (J5) recently sponsored an event called “The Cyber Challenge.” The purpose of the event was to find people and organizations using bitcoins to conduct tax fraud. Investigators, cryptocurrency specialists, and data scientists from J5 member nations participated in the event. Their job was to maximize the use of data gathered from open and investigative sources that each nation had access to.
Five of these events have been hosted by the J5 since its founding in 2018. The 2022 event was centered around decentralized exchanges (DEX) and nonfungible tokens (NFTs). Financial Intelligence Units (FIUs) from each of the J5 nations participated in the most recent 2023 event, and blockchain analysis firms Chainalysis, BlockTrace, and AnChain represented the private sector. It was the most cooperative task to date as a result. Significant leads for more research were produced by the J5, and these leads have previously assisted in the discovery of multi-million dollar cryptocurrency Ponzi schemes like the BitClub Network.
The Australian Taxation Office’s deputy commissioner, John Ford, underlined the value of public-private partnership in producing operational results and exchanging specialized knowledge, methods, and protocols. As noted by Ryan Ryder of Chainalysis, the intrinsic transparency of cryptocurrencies, when paired with global specialists from both the public and commercial sectors, can work together to detect and stop unlawful activity—an undertaking that is still unattainable in traditional banking. Seven cryptocurrency professionals were recently highlighted in an article Innovation Circle to assist Web3 companies in getting ready for tax season. They suggested best practices such as picking a nation that is tax-friendly, making sure that payments are made on time, staying away from shortcuts, hiring a seasoned crypto tax accountant, precisely recording all of your transactions, getting professional legal advice, automating transaction tracking, and utilizing specialized software.