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James Carter

March 7, 2023

Israel Tax Authority Probes NFT Creators Over Alleged Tax Evasion

The National Financial Transactions Authority (Tax Authority) in Israel is accused of failing to report sales totalling $2.2 million throughout the year 2021, which led to the arrest of two NFT creators who are now facing charges of tax evasion and money laundering.

Israel Tax Authority Probes NFT Creators

Avraham Cohen and Anthony Pollack, the owners and operators of the NFT project holyrocknft.com, have been arrested for failing to report millions of dollars in revenue collection received from the sale of their digital works, according to a recent report by the Israeli news source Ynetnews.

According to the investigation, the suspects have allegedly sold 1,700 NFTs since 2021 in exchange for 620 ETH, which has a value of approximately $2.2 million. These transactions have not been reported. The tax authorities consider these receipts to be earnings from a business, but the two individuals did not report them as such.

It should be noted that the funds were moved between a number of different digital wallets, which is a move that amounts to money laundering. The Jerusalem Magistrate’s Court ordered the two to turn over the ETH tokens and the keys to associated wallets before releasing them on probation. The court also placed the two on supervision.

Holy Rocks NFT is a non-fungible token project that will be released in 2021. It will provide users with three-dimensional scanned imaging of the stones that make up the holy site. Reportedly, the founders of the project went before the court a year ago in an effort to defend certain misunderstandings, including the fact that they did not scan images of the stones that make up the holy site.

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According to the information provided on its website, the project has nevertheless consented to halt the sale of Holy Rocks NFTs until the conclusion of the legal proceedings. The group that is responsible for the organization made a statement to the effect that “however, we will make it clear that all other activities planned for the community will take place as scheduled.”

This decision was made after Ben Benhorin, a prominent designer located in Tel Aviv was arrested by Israeli authorities the previous week on suspicion of failing to disclose cryptocurrency earnings in tax reports. This action comes as a result of Ben Benhorin’s arrest. According to data provided by OpenSea, Benhorin has issued a great number of NFTs on the platform over the course of the last few years.

NFT Hype Cools Down Amid Crypto Market Crash

It is important to note that the excitement surrounding non-fungible tokens (NFTs) and metaverse assets has significantly subsided over the course of the past year, coinciding with the broader market downturn that has caused major cryptocurrencies such as Bitcoin and Ethereum to lose approximately 70% of their value in comparison to their all-time highs.

The experts on non-fungible tokens at Casinos En Ligne predict that sales of non-fungible tokens will drop by 83% compared to the previous year in 2022. In addition, the volume of non-financial transactions conducted through NFTs dropped by at least 83% across all markets, including art, gaming, and collectables.

In January 2022, sales of non-fungible tokens reached a record high of $2.8 billion per month, marking an all-time high for the NFT market. However, following a string of bankruptcies and implosions that saw approximately $2 trillion wiped out of the crypto market, that figure saw a steep drop earlier this year, bringing the year’s total to its lowest point.

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The Defiance Digital Revolution Exchange Traded Fund (ETF), which is the world’s first ETF to concentrate on non-fungible tokens (NFTs) and metaverse assets, revealed early in February that it would terminate operations by the month’s end.