The tax officials of Australia, ATO are investigating into a tax escaping scheme related to cryptocurrencies. A leading daily in Australia reported it on Tuesday.
The tax avoidance scheme was detected through data sharing. It is found that some of the key countries are involved in the cryptocurrency abuse. The report was revealed after J5 and cross border investigation.
J5 was created almost a year ago by five world powers US, UK, Netherlands, Australia, and Canada. The group is particularly interested in cryptocurrencies and tax crimes related to it. As per the report, the group is investigating into 60 such transnational crimes of which 12 are from Australia itself.
The Deputy Commissioner of ATO, Will Day has told, upon investigation, they have found one global financial organization to help its client to conceal about their asset and income information. He also said they are finding cryptocurrencies are getting used in a way that was never used before. He further added in Austria people are investing in cryptocurrencies legitimately, but cases are also found where people are using it to perform tax crimes.
Still, many critics of cryptocurrency belittle it and call it a bubble. But the most powerful and wealthy countries of the world conceive it as a threat to their tax system. The cooperation of J5 countries has made it easy to exchange information and analysis on transnational tax evasion. As per a report with the joint effort from J5 countries, a crypto “mixer” was shut down.
Crypto “mixer” services increase the scope of tax evasion as it increases the secrecy of the virtual currency owners. The algorithm used here makes it extremely difficult to identify the actual possessor of the asset.
Will Day showed his concern more on the link between virtual currency investment and money laundering as the criminals are sharing cryptocurrencies online to avoid tax. As per him, the criminals are at higher risk of being caught after the J5 collaboration.
In the meantime, Vancouver is planning to close the crypto ATMs, as they feel it works as a machine for money laundering. The incidents have increased after the virtual assets have got regulated in the country.