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International Tax Union Lists 'Red Flags' for Fraud in NFT Markets
The International Tax Union has released a list of “red flag indicators” of fraud in the NFT market to help banks.
Kabir V.
7:28 30th Apr, 2022
Frauds

Law enforcement, and private companies fight criminal activity. This guidance is the first of its kind from the Joint Chiefs of Staff Global Tax Enforcement (J5).

In the document released on Thursday, J5 listed 24 "red flags" for the NFT market, divided into "strong" and "moderate" signs of potential fraud. Among J5's "strong" indicators of potential fraud, law enforcement is encouraged to be on the lookout for phishing scams, fake token giveaways, social media impersonation, and other potential money-laundering transactions.

In addition, signs of money laundering, such as NFTs being sold in large quantities and sold from the same party or a third party, a smaller amount is regained. "Moderate" metrics include non-existing contract addresses, missing information in item description fields, and code reused in NFTs.

The document states that all these indicators are present in actual projects, not just criminal signs. However, they should factor in when deciding whether a project is legal or not.

Source



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