By Richard Hines
The Internal Revenue Service has recorded a growing number of cases of tax evasion than money laundering, and they are on the lookout for any crypto-related crime or transaction that evades taxes and involves money laundering.
A Growing Number Of Tax Evasion Cases
The IRS is now dealing with a considerably larger number of cases than in the past, rather than only money laundering situations.
A large number of crypto cases are piling up at the Internal Revenue Service’s criminal investigative division (IRS).
According to Jim Lee, the division chief, many tax-related cases would be open to the general public.
According to a Bloomberg report, some of the IRS division’s most frequent cases involve swapping crypto for fiat currency and failing to disclose crypto payments.
The investigator mentioned a change he’s noticed in the last three years. Most cases in the past revolved around money laundering, but now tax evasion has exploded and accounts for more than half of all cases.
Crypto has a reputation for being a simple tool for committing criminal offenses such as scams and ransomwares.
However, as blockchain firms like Chianalysis build increasingly useful tools for detecting and tracing illicit payments, money laundering has become a minor component of crypto-based activity.
Surprisingly, the Treasury Department has stated that, while crypto money laundering is a serious problem, it is significantly less severe than fiat money laundering.
Can Blockchain Security Hinder Investigations?
Tools used to make crypto easy to access and use, are ushering in its adoption as a payment method. Furthermore, because transactions are anonymous, the government has a tough time determining who is executing those transactions and who is at the receiving end.
Nonetheless, Lee assures the public that he is capable of tracking every cryptocurrency transaction. This was backed by the division’s annual report, which highlighted cases of financial seizures linked to criminal accounts.
One report showed that a culprit and his wife were arrested for money laundering in the 2016 Bitfinex hack. This was the division’s largest reported money seizure.
Lee claims that the division has confiscated $7 billion in crypto assets since it began investigating crypto crimes.
While the transparency of blockchain has been beneficial to law enforcement agencies, regulators have been wary of new capabilities designed to improve investor and user privacy on the block chain.