5 nations challenge crypto experts and investigators to target tax crimes
The Joint Chiefs of Global Tax Enforcement (J5), a global anti-tax fraud group, hosted investigators, cryptocurrency experts and data scientists in “The Cyber Challenge” event to track down individuals and organizations committing tax fraud.
The J5 members comprise the criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States, which collaborate in the fight against international and transnational tax crime and money laundering.
The group includes the Australian Taxation Office, the Canada Revenue Agency, the Dutch Fiscal Information and Investigation Service, His Majesty’s Revenue and Customs from the U.K. and IRS-CI from the United States. Participants included experts from J5 countries, which were tasked with optimizing the usage of data acquired from a variety of open and investigative sources available to each country.
Since its inception in 2018, the J5 has hosted five such events. In 2022, the fourth event focused on nonfungible tokens (NFTs) and decentralized exchanges (DEX). Sharing details about the latest 2023 event, the U.S. Internal Revenue Service report stated:
“This is the first Challenge where Financial Intelligence Units (FIUs) from each J5 country participated. Private sector was represented by blockchain analysis companies Chainalysis, BlockTrace, and AnChain making this the most collaborative Challenge to date.”
In the process, the J5 generated significant leads for further investigation, which, in the past, helped uncover multimillion-dollar crypto Ponzi schemes, such as the BitClub Network. John Ford, deputy commissioner of the Australian Taxation Office, stated:
“This collaboration between public and private specialists not only generates operational outcomes, but shares expert training, techniques and procedures, which is integral for the participants to remain proactive and effective in a rapidly evolving operating environment.”
Ryan Ryder from Chainalysis pointed out that crypto’s inherent transparency, coupled with international public and private sector experts, “can collaborate to identify and shut down illicit activity,” a task that remains impossible in traditional finance.
Related: G7 countries to launch AI code of conduct: Report
The Cointelegraph Innovation Circle recently featured seven crypto experts in an article to help Web3 companies prep for tax season. First and foremost, Web3 companies must constantly monitor the tax implications of their activities and diligently work to ensure they’re meeting their obligations.
In addition, the members of the Cointelegraph Innovation Circle recommended seven best practices to ensure adherence to tax formalities. Choosing a tax-friendly country while ensuring on-time payment is a top priority, in addition to avoiding shortcuts and finding an experienced crypto tax accountant.
Other key factors include accurate documentation of all activities, seeking expert legal counsel, automating transaction tracking and using specialized software.
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According to the US Department of Justice, Wolf Capital’s co-founder has pleaded guilty to wire fraud conspiracy for luring 2,800 crypto investors into a Ponzi scheme.
Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.
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The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.
She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.
She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.
But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ trip to China
However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
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