NFT Creators Investigated in Israel for Alleged Tax Evasion – Taxes Bitcoin News

Israel’s tax authorities are hunting two creators of non-fungible tokens (NFTs) suspected of failing to report nearly $2.2 million in revenue. News of the investigation follows the recent arrest of a graphic designer from Tel Aviv accused of similar offences.

Thousands of ‘Western Wall NFTs’ allegedly sold without tax reporting

The Israel Tax Authority is investigating two NFT creators in Jerusalem who failed to report millions of US dollars in revenue received from the sale of their digital works. The tokens they offered were based on a 3D scan of the stones on the Western Wall.

The suspects, Avraham Cohen and Antony Polak, own the website Holyrocknft.com where they sold their NFTs, the Jerusalem Post reported on Sunday. The platform claims to “combine business and technological progress with Jewish faith and spirit.”

Investigators were able to determine that since 2021, the two Israelis sold 1,700 digital works for 620 ETH. At exchange rates at the time of the transaction, the total was worth about 8 million shekels (or close to $2.2 million). Tax authorities view this income as business income, but the couple did not report it as such.

Some of the funds have been transferred between different wallets, which raised further suspicions of criminal activity. Nevertheless, a judge in a Jerusalem court released the suspects under certain conditions, including handing over control of the ether wallets.

The project has also agreed to halt the sale of Holy Rock’s NFTs until the end of legal proceedings, according to its website. “However, we want to make it clear that all other activities planned for the community will go ahead as planned,” the team behind the organization said.

A week ago, a graphic designer from Tel Aviv, who created tokenized digital art, was arrested for not reporting income of 3 million shekels from his sales on the NFT marketplace Opensea, as well as the conversion of 30 ethereum-based tokens he had received as payments to other currencies.

Crypto assets in Israel are not yet fully regulated. The country’s public stock exchange recently proposed rules allowing some clients to trade them, and the Bank of Israel published recommendations for the regulation and oversight of stablecoin-related activities.

Do you think 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.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.