NFTs and Crypto having more and more people investing it has become a trillion dollars industry and is still continuing to grow month on month. This is a sign that this is not going away and many governments are looking how it will impact them or how to mange this new growing market.
The Internal Revenue Service’s top special agent told a conference that NFTs and crypto are the “future” but that fraud and manipulation remain rife.
During a virtual event held on Tuesday by the USC Gould School of Law, Korner spoke from the IRS Criminal Investigation Los Angeles office. Bloomberg reports Korner said:
“We’re just seeing mountains and mountains of fraud in this area.”
He told the event the IRS CI division acknowledges the significant growth of the crypto sector, but noted that the usage of digital assets has not been limited to payments and trading. He outlined various illicit behaviors such as fraud, including money laundering, market manipulation and tax evasion.
Korner highlighted market manipulation in particular, pointing to high-profile investors having the ability to sway asset prices with a single Tweet.
He spoke about the involvement of celebrities in the space, perhaps thinking of examples as Kim Kardashian and Floyd Mayweather — who recently got into hot water over promoting an allegedly fraudulent token dubbed EthereumMax. Korner said:
“We’re not necessarily out there looking for celebrities, but when they make a blatant or open comment that says ‘Hey, IRS, you should probably come look at me,’ that’s what we do.”
‘This space is the future’
During the event, Korner stated the reason the division was actively training and educating its agents on crypto and NFT regulation, was because “this space is the future” and wasn’t going anywhere.
Korner also stated that the IRS has collaborated with other federal agencies, including the Justice Department to “make sure everyone is on the same page and staying ahead of the criminals,’ he said.
IRS investigators seized $3.5 billion worth of cryptocurrencies tied to financial crimes during the fiscal year 2021. This accounted for 93% of all the assets seized by the division in that time frame.
“IRS CI ended the year with 80 cases in its inventory that it was still actively working on where the primary violation was tied to crypto,” Korner said.