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Friday, June 9, 2023

NFT Creators Investigated in Israel for Alleged Tax Evasion

NFT Creators Investigated in Israel for Alleged Tax Evasion – The Israel Tax Authority is currently looking into the financial records of two NFT creators from Jerusalem who allegedly failed to disclose the large sums of money they earned from selling their digital pieces. The NFTs they produced were created from a 3D scan of the stones from the Western Wall.

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According to the Jerusalem Post, Avraham Cohen and Antony Polak, the individuals under investigation, reportedly operated the website Holyrocknft.com, where they sold their NFTs. The website’s stated aim is to combine the business world and technological progress with Jewish faith and spirit. Based on the investigation, the two Israeli creators sold a total of 1,700 digital pieces for 620 ETH since 2021. 

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At the time of the transactions, the value of these sales was estimated to be around 8 million shekels or approximately $2.2 million. The tax officials consider this income to be business revenue, which the duo did not report. Suspicion of criminal activity was raised when it was discovered that some of the funds were moved between various wallets.

However, a judge in a Jerusalem court released the suspects under certain conditions, which include surrendering control over their 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.

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Just one week ago, a graphic designer from Tel Aviv was taken into custody for failing to report his earnings of 3 million shekels from the sale of his tokenized digital artwork on the NFT marketplace Opensea. Additionally, the individual in question converted 30 ethereum-based tokens he received as payment into different currencies, which also went unreported.

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As of now, there is no comprehensive regulation in Israel for cryptocurrency assets. However, the country’s public stock exchange has recently suggested new regulations that would permit certain clients to trade them, and the Bank of Israel has published guidelines for the supervision and regulation of stablecoin-related activities.

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