Malaysia launches ‘Ops Token’ to tackle crypto tax evasion

The Malaysian Inland Revenue Board (IRB) has launched a special operation called “Ops Token” to combat crypto tax evasion and improve overall tax administration in the country.

IRB Malaysia declares war on crypto tax evasion

According to sources, the Malaysian Inland Revenue Board (IRB) joined forces with the Royal Malaysian Police and Cyber ​​Security Malaysia (CSM) to launch an operation involving 38 personnel across 10 locations in the Klang Valley.

According to reports, the value of cryptocurrency transactions in Malaysia this year is estimated at RM1.441 trillion ($340 billion).

During the “Ops Token” operation, the IRB accessed cryptocurrency trading data stored on mobile devices and computers, allowing them to track the digital assets traded and evaluate the associated profits.

The team says it has uncovered examples where organizations were set up solely for cryptocurrency transactions in order to avoid tax liabilities.

The tax authority announced that the data collected will be subjected to detailed analysis to determine the value of the cryptocurrency assets traded and the profits made. This process aims to reveal the extent of tax evasion not previously disclosed to the IRB.

Commenting on the latest development, CEO Datuk Dr Abu Tariq Jamaluddin stated that individuals trading cryptocurrencies in Malaysia must comply with income tax regulations.

He urged all parties involved in such activities to immediately declare their taxes at the nearest IRB office to avoid possible compliance penalties.

The team says the implementation of this operation aims to increase the country’s revenue by minimizing tax evasion and improving tax efficiency, thereby supporting the sustainability of Malaysia’s revenue collection efforts.

Tax evasion, regulatory scrutiny

Cryptocurrency trading is frequently linked to cases of tax evasion, leading to calls for stricter regulations and reporting standards.

The collapse of the infamous Sam Bankman-Fried’s FTX cryptocurrency exchange was attributed to fraudulent reporting and mismanagement of funds. This incident triggered a series of regulatory crackdowns and increased scrutiny, highlighting the critical need for transparency and sound financial practices in the cryptocurrency industry.

According to Bloomberg, the Biden administration is proposing to strengthen tax compliance by requiring cryptocurrency transfers of at least $10,000 to be reported to the Internal Revenue Service.

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Nigeria

Tigran Gambaryan, a compliance officer at Binance, was arrested in Nigeria on charges of tax evasion and money laundering. The arrest followed a demand for $150 million in crypto payments that Gambaryan interpreted as an extortion attempt.

While Gambaryan was ultimately cleared of tax evasion charges, the incident underscores the regulatory complexities facing cryptocurrency exchanges in various jurisdictions.