IRS Special Agent Cautious of Crypto's Future, Sees "Mountains of Fraud"

In a virtual event held by the USC Gould School of Law, IRS special agent Ryan Korner from the Criminal Investigation’s Los Angeles field office commented on the current state and the future of crypto and NFTs.

According to Korner, although crypto and NFTs are the future and wouldn’t be going anywhere, there is still significant fraud and manipulation in this space.

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Korner stated that the IRS CI division acknowledges the monumental growth of the crypto sector in recent years. Despite this, the use of digital assets outside trading should not be overlooked. He emphasized that criminal activity like fraud, money laundering, and tax evasion among others, is still rampant.

We’re just seeing mountains and mountains of fraud in this area.

Special attention was drawn to market manipulation. Korner noted that often all it takes to sway the market is a tweet from a high-profile celebrity.

He elaborated on the celebrity involvement in the crypto field, using Kim Kardashian and Floyd Mayweather as examples, given their recent involvement with the allegedly fraudulent EthereumMax token. Commenting on the situation, Korner said:

We’re not necessarily out there looking for celebrities, but when they make a blatant or open comment that says ‘Hey, IRS, you should probably come look at me,’ that’s what we do

Discussing the developments within the IRS, Korner mentioned that the IRS CI is actively educating its agents on crypto regulations. He said the reason for the extensive training is that “this space is the future” and isn’t going anywhere any time soon.

Korner said that the IRS has collaborated with the Justice Department as well as other federal agencies to ensure that everyone is up to speed and prepared to combat crypto fraud—and, more importantly, stay ahead of the criminals.

During the fiscal year 2021, IRS investigators seized over $3.5 million worth of cryptocurrencies related to financial criminal activities. This amount accounted for about 93% of all assets seized last year.

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