May 27th 2024

An international group of tax chiefs – J5 – has advocated financial institutions to be mindful of crypto risk-indicators, prone to illicit activities.

The Joint Chiefs of Global Tax Enforcement (J5) has listed-down five risk-indicators associated with cryptocurrencies. The indicators are developed by a specialized team of cyber experts from member countries.

J5 is a global joint venture between five world’s largest taxation organizations to combat financial crimes worldwide. The association consists of the IRS from the US, UK’s HMRC, Canadian Revenue Agency (CRA), Australian Taxation Office (ATO) and the Fiscal Information and Investigation Service (FIOD) from the Netherlands.

Dubbed “Crypto Assets Risk Indicators,” the document highlights several risk indicators. These “play a pivotal role in enhancing the ability of financial institutions to detect and report money laundering and illicit activities involving crypto assets.”

The red-flags listed by J5 include crypto asset layering, geographical risk indicators, high-risk counterparties, unknown transaction recipients and ransomware attacks.