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  • J5 Countries are Pooling Resources Aimed at FINtech Companies

    New York – This week the Joint Chiefs of Global Tax Enforcement, known as the J5, have brought together investigators, cryptocurrency experts, and data scientists from each of the five countries to trace both individuals and organizations who are committing tax crimes around the world.

    J5 members, which includes the Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty’s Revenue and Customs (HMRC) from the UK, and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the United States are utilizing their various investigative sources and analytical tools to find tax offenders using cryptocurrency based on the new data available to them through the event called The Challenge.

    Originally hosted by the Fiscal Intelligence and Investigation Service (FIOD) in Utrecht in 2018, The Challenge was formed after a “call to arms” from the OECD Taskforce on Tax Crime, and since has been working together to share intelligence and conduct coordinated operations to fight against transnational tax crime.

    The United States hosted a second “Challenge” in Los Angeles in 2019 which focused on cryptocurrency. This year, however, The Challenge was held virtually due to the COVID-19 pandemic and was focused on Financial Technology (FINtech) companies.

    FINtech companies invent innovative financial solutions to develop and market new financial products and payment possibilities like cryptocurrency, crowdfunding loans, and payment processing platforms like PayPal. With such products, FINtech companies are essentially competing with corporate banks and insurance companies leading them to enormously profit from this – in the billions of dollars. Thus, experts are working relentlessly to focus on the legal opportunities’ countries have to start J5 investigations aimed at FINtech companies.

    Although many FINtech companies have compliance regulations in place prohibiting financial crime, the FINtech industry can still be used by money launderers to commit crimes, such as tax evasion. This is essentially due to the online nature of the products as intangible online assets and services can be traded from anywhere in the world, only limited by the availability of the Internet.

    During this year’s virtual Challenge, legal experts of the five countries discussed the fiscal, compliance, and criminal options that each country had regarding FINtech companies. Thereafter, each country created a list of specific companies where leads indicated criminal activity. By the end of the Challenge, each country identified specific companies that will be a part of their investigations.

    For more information about J5, visit http://www.irs.gov/J5

    Alicea Castellanos | 03/25/2021





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