Israel’s tax authorities are prosecuting two non-fungible token (NFT) creators suspected of underreporting nearly $2.2 million in revenue. News of the investigation follows the recent arrest of a graphic designer from Tel Aviv accused of similar crimes.
Thousands of “Western Wall NFTs” allegedly sold tax-free
Israeli tax authorities are investigating two NFT creators in Jerusalem who have not reported millions of dollars in revenue received from the sale of their digital works. Their proposed tokens are based on 3D scans of the stones of the Western Wall.
The suspects, Abraham Cohen and Antony Pollack, own the website Holyrocknft.com through which they sold their NFTs, the Jerusalem Post reported on Sunday. The platform claims to “combine the world of business and technological progress with the Jewish faith and spirit.”
Investigators were able to establish that since 2021, the two Israelis sold 1,700 digital works for 620 ETH. At exchange rates at the time of the transactions, the total value is about 8 million shekels (or nearly $2.2 million). Tax officials view this income as business profits, but the two do not report it as such.
Some of the funds were transferred between different wallets, which raises further suspicions of criminal activity. However, a judge in a Jerusalem court released the suspects under certain conditions, including handing over control of the ether wallets.
The project also agreed to halt the sale of Holy Rocks NFTs pending the end of the legal proceedings, according to its website. “However, we will make it clear that all other activities planned for the community will go ahead as scheduled,” the team behind the organization said.
A week ago, a graphic designer from Tel Aviv who was creating tokenized digital art was arrested for failing to report NIS 3 million in revenue from his sales on NFT marketplace Opensea, as well as the conversion of 30 ethereum-based tokens he had received such as payments in other currencies.
Crypto assets in Israel are yet to be fully regulated. The country’s public stock exchange recently suggested rules allowing certain clients to trade with them, and the Bank of Israel published recommendations for regulating and supervising activities related to stablecoins.
Do you think the Israeli tax authorities will continue to crack down on NFT creators who do not report their income? Share your thoughts on the topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Rebuttal: This article is for informational purposes only. This is not a direct offer or solicitation of an offer to buy or sell, nor is it a recommendation or endorsement of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.
#NFT #creators #investigation #Israel #alleged #tax #evasion #Taxes #Bitcoin #News