Israel’s tax authority is after two creators of non-fungible tokens (NFTs) suspected of failing to report almost $2.2 million in revenue. The news of the investigation comes after the recent arrest of a graphic designer from Tel Aviv accused of similar offenses.
Thousands of ‘Western Wall NFTs’ Allegedly Sold Without Tax Reporting
Israel Tax Authority is investigating two NFT creators in Jerusalem who did not report millions of U.S. 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 Holyrocknft.com website through which they sold their NFTs, the Jerusalem Post reported on Sunday. The platform claims to “combine the business world and technological progress with Jewish faith and spirit.”
Investigators were able to establish that since 2021 the two Israelis sold 1,700 digital works for 620 ETH. At rates at the time of transactions, the total was worth around 8 million shekels (or close to $2.2 million). Tax officials view these revenues as business earnings, but the pair did not report them as such.
A portion of the funds have been transferred between different wallets, which raised additional suspicions of criminal activity. Nevertheless, a judge in a Jerusalem court released the suspects under certain conditions, including handing over control over the ether wallets.
The project has also agreed to stop selling the Holy Rocks NFTs until the end of legal proceedings, according to its website. “However, we will make it clear that all other activities planned for the community will take place as scheduled,” the team behind the organization stated.
A week ago, a graphic designer from Tel Aviv, who was creating tokenized digital art, was arrested for not reporting revenues 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 into other currencies.
Crypto assets in Israel are 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 for regulating and supervising stablecoin-related activities.
Do you think 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.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.