Israel’s tax authority is pursuing two non-fungible token (NFT) creators suspected of failing to report nearly $2.2 million in revenue. News of the investigation follows the recent arrest of a Tel Aviv graphic designer accused of similar offences.
Thousands of ‘Western Wall NFTs’ allegedly sold without tax reporting
The Israel Tax Authority is investigating two NFTs creators in Jerusalem who did not 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 of the Western Wall.
The suspects, Avraham Cohen and Antony Polak, 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.”
The researchers were able to establish that since 2021 the two Israelis sold 1,700 digital works for 620 ETH. At the prevailing exchange rate at the time of the transactions, the total was worth about NIS 8 million (or about $2.2 million). Tax officials view this income as business profit, but the couple did not report it as such.
A portion of the funds was transferred between different wallets, raising additional suspicions of criminal activity. However, a Jerusalem court judge released the suspects under certain conditions, including handing over control of the ether wallets.
The project has also agreed to stop selling Holy Rocks NFTs until the end of legal proceedings, according to its website. “However, we will make it clear that all other planned activities for the community will take place as scheduled,” the team behind the organization stated.
A week ago, a Tel Aviv graphic designer, creating tokenized digital art, was arrested for failing to report income of NIS 3 million from his sales on the Opensea NFT marketplace, as well as converting 30 ethereum-based tokens. that I had received as payments in other currencies.
Crypto assets in Israel have yet to be comprehensively regulated. The country’s public stock exchange recently proposed rules allowing some clients to trade them, and the Bank of Israel published recommendations to regulate and supervise activities related to stablecoins.
Do you think the Israeli tax authorities will continue to crack down on NFT creators who fail to report their earnings? Share your thoughts on the subject in the comments section below.
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