The Joint Chiefs of Global Tax Enforcement (J5) recently released the ‘J5 NFT Marketplace Red Flag Indicators' to provide insight to banks, law enforcement partners, and private industry regarding potential red flags in non-fungible token (NFT) marketplaces. The J5 consists of five tax agencies (the US, the UK, Canada, the Netherlands, and Australia) collaborating to combat transactional tax crimes.
This intelligence bulletin — the first of its kind from the J5 — lists items that the J5 believes should draw concern when dealing with or planning to purchase NFTs. It is not meant to be an all-inclusive list of risks associated with NFTs, but rather a compilation of best practices identified by the five countries in the J5 from their dealings with NFT transactions in various investigations. The lists, providing “strong” and “moderate” indicators, are intended to highlight possible account or transaction attributes that may provide perspective in evaluating potential fraud.