IRS Looking Into Crypto Kiosks and ATM Use
- The criminal investigation chief of the IRS, John Fort, is looking into the issue of blockchain technology enabling illegal activity.
- Fort also said that crypto kiosks and ATMs should follow anti-money laundering laws and KYC procedures.
Bitcoin and Ethereum ATMs. Quartz
The Internal Revenue Service in the U.S. said that crypto kiosks and Bitcoin ATMs raised weighty potential tax issues, enough to draw the attention of its criminal investigators, Bloomberg reported on 15 November.
John Fort, IRS criminal investigation chief, said his team is policing the illegal activity enabled by blockchain technology by collaborating with law enforcement partners despite no public cases linking crypto kiosks being filed.
Away from the bustle of a blockchain conference held in New York, Bloomberg Law learned from John Fort that the IRS is focused on the following:
- Cash exchanged for cryptocurrency via Crypto ATMs and kiosks.
- Cash exchanged for cryptocurrency through banks accounts.
- The users of cryptocurrency ATMs and kiosks.
- The source of the funds.
- The operators of the kiosks.
Even though cryptocurrency vending machines have enabled users to exchange fiat for cryptocurrency in numerous major U.S. cities, in some cases it has been used mistakenly to launder money. Kiosks charge a flat fee for their use and get a fraction of the cash exchanged.
John Fort continued to underscore that kiosks and ATMs should follow KYC and anti-money laundering laws, though some have a degree of obedience to these directives. Compliance to the rules of KYC and anti-money laundering is the main goal of the IRS in this crackdown.
The technology grants its users an intrinsic level of secrecy and non-disclosure which can encourage non-compliance of tax laws, an emerging cryptocurrency tax issue as noted by John Fort. He also said that the IRS has open cases connected to cryptocurrency tax matters but zero public cases have been filed.
In a speech made at the New York blockchain conference, Fort said that the IRS is not only focusing its cleanup on local cryptocurrency exchanges, but also foreign exchanges where many have shifted to trade fiat for crypto, owing to the stern action by authorities in the United States.
- The IRS filed its claims against FTX under the “Admin Priority” classification, which could allow it to supersede the claims of other creditors in the bankruptcy case.
- The largest of the claims is against Alameda Research LLC, with the IRS claiming around $20 billion in partnership taxes and close to $400 million in payroll taxes.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
lev radin/Shutterstock
- The U.S. Department of Justice worked together with the Federal Bureau of Investigations, Treasury Department, and French authorities to take down the laundering operation.
- Crypto Twitter, however, was not impressed with the “major international cryptocurrency enforcement action” against the little known platform.
- CoinFlip users will be able to purchase AAVE tokens through the company’s extensive ATM network.
- The addition of AAVE will open up new opportunities for the unbanked and the underbanked, CoinFlip CEO said.