Israel’s taxation office is presently looking into two developers of non-fungible tokens (NFTs) who reportedly failed to declare nearly $2.2 million in revenues. An arrest of an Israeli graphic artist for the same offence was made earlier.
Thousands of ‘Western Wall NFTs’ Allegedly Sold Without Tax Declaration
The Israel Tax Authority is presently examining two creators of NFTs from Jerusalem, suspected of not declaring millions of U.S. Dollars earned from the sale or licensing of digital works. The tokens were based on 3D scanning of the stones of the Western Wall.
The two suspects, Avraham Cohen and Antony Polak, used the website holyrocknft.com to offer their NFTs. According to the Jerusalem Post, the platform claimed to “combine the business world and technological progress with Jewish faith and spirit.”
Investigators found that the two sold 1,700 digital works for 620 Ether (ETH). The total sum of the transactions was around 8 million shekels ($2.2 million at the time). Tax authorities believe these revenues to be business income, but the couple did not report them.
The funds were also transferred between several wallets, raising further suspicions of criminal activity. However, a judge at the Jerusalem Court released the suspects on the condition that they surrender control of the ether wallets.
The project has also agreed not to sell the project, Holy Rocks, as listed on their website. NFTs are not allowed to be sold until the conclusion of the legal proceedings. Nevertheless, the team behind the project said that all other activities planned for the community will take place as scheduled.
A week ago, a graphic designer from Tel Aviv was arrested for similar charges. He was creating tokenized digital art and did not declare revenues of 3 million shekels from sales on the NFT Marketplace, Opensea. He also changed 30 tokens that were ethereum-based to other currencies.
Crypto assets are still not fully regulated in Israel. The country’s public stock exchange recently launched a platform for NFTs, announced during a conference held by the Israel Securities Authority back in February this year.
Israeli tax authorities are cracking down on Non-Fungible Token (NFT) creators, who have allegedly failed to report their earnings and declare them for taxation purposes. The news has come as the Bank of Israel has proposed new regulations for the trading of NFTs and the issuance of stablecoins.
The Israel Tax Authority (ITA) has been investigating a number of NFT creators in the country, with reports that some of them had failed to report their earnings from the sale of their digital artworks. The ITA has also been encouraging NFT creators to declare their earnings and pay taxes accordingly.
The Bank of Israel has also taken steps to regulate the digital asset market in the country, with the issuance of draft regulations for the trading of NFTs and the operation of stablecoins. The regulations proposed by the Bank of Israel are meant to provide clarity on the rules and regulations governing the digital asset market, as well as to protect investors.
The Bank of Israel has also published its recommendations for the regulation and supervision of stablecoin-related activity. The recommendations include measures to ensure that the stablecoin activities are conducted in a transparent and secure manner, as well as to ensure that the participants comply with the applicable laws and regulations.
The ITA and the Bank of Israel’s actions are part of a larger effort to ensure that the digital asset market in Israel is compliant with the country’s laws and regulations. With the increasing popularity of cryptocurrencies and other digital assets, the government is keen to ensure that these assets are being properly taxed and that the market is properly regulated.
It remains to be seen whether the ITA’s investigations into NFT creators will result in any legal action, but it is clear that the government is taking steps to ensure that the digital asset market in the country is compliant with the law. It is also likely that the government will continue to take steps to clamp down on those who fail to report their earnings and pay taxes accordingly.
