An alliance of 5 nations, including the UK and US, has been established to look at ways to tackle financial crimes, including looking at cryptocurrency and the fact that it is being used to avoid paying local taxes, as well as for money laundering.
There has been a lot of call for transparent regulations, not only from governments but from some analysts and investors too. They believe that regulation will provide stability, flatten out some of the volatility that is present in the marketplace, and attract more investors, in particular institutional investors. Some countries have made moves to counter what they perceive as a growing financial threat. China initially banned all cryptocurrency trading, although they have softened their approach recently, while the Reserve Bank of India has directed all banks to wind up trading with any cryptocurrency exchanges. During a meeting of the G20 nations in April this year, the world’s largest economies concentrated a lot of discussion on the topic of how best to tackle the problem, although nothing concrete has been determined or announced.
Investigating Cryptocurrency Crimes
The Joint Chiefs of Global Tax Enforcement (J5) has not been set up to determine overall regulations, but they will be looking at how to tackle cross-border financial crimes. Cryptocurrency does not operate within any geographical boundaries, and the group has said that they will be looking at cryptocurrency because there is the potential that criminals will increasingly use it to launder money, but also because of a lack of financial reporting for tax purposes.
The group is made up of the Australian Taxation Office, the Canada Revenue Agency, the Fiscale Inlichtingen-en Opsporingsdienst of the Netherlands, H.M. Revenue and Customs of the UK, and the US Internal Revenue Service Criminal Investigation.
According to the J5 website, the group will “collaborate internationally to reduce the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.”