The Inland Revenue Board (IRB) of Malaysia has started a new operation called “Ops Token” to fight against crypto tax evasion and improve tax administration in the country. The IRB has teamed up with the Royal Malaysia Police and CyberSecurity Malaysia (CSM) for this operation, which involves 38 personnel working across 10 locations in the Klang Valley.
Reports indicate that the value of cryptocurrency transactions in Malaysia this year stands at around RM1.441 trillion ($340 billion). During the “Ops Token” operation, the IRB has been able to access cryptocurrency trading data from mobile devices and computers, allowing them to track digital assets traded and evaluate the associated profits.
The team has found cases where entities were set up solely for cryptocurrency transactions in order to avoid tax responsibilities. The IRB has made it clear that the data collected will be thoroughly analyzed to determine the value of cryptocurrency assets traded and the profits made. This analysis is intended to uncover the extent of tax evasion that was previously undisclosed to the IRB.
CEO Datuk Dr Abu Tariq Jamaluddin emphasized that individuals involved in cryptocurrency trading in Malaysia must follow income tax regulations. He has urged all parties engaged in such activities to declare their taxes promptly at the nearest IRB office to avoid potential penalties for non-compliance.
The objective of this operation is to increase the country’s revenue by reducing tax evasion and enhancing tax efficiency, ultimately strengthening Malaysia’s revenue collection efforts. Cryptocurrency trading has often been associated with tax evasion, leading to calls for stricter regulations and reporting standards.
The collapse of the FTX cryptocurrency exchange, owned by Sam Bankman-Fried, was reportedly due to fraudulent reporting and fund mismanagement. This incident triggered a series of regulatory crackdowns and increased scrutiny, highlighting the importance of transparency and strong financial practices in the cryptocurrency industry.
In a separate development, Tigran Gambaryan, a compliance officer at Binance, was arrested in Nigeria on charges of tax evasion and money laundering. Gambaryan was asked to pay $150 million in crypto, which he interpreted as an extortion attempt. Although he was eventually cleared of the tax evasion charges, this case demonstrates the regulatory challenges faced by cryptocurrency exchanges in different jurisdictions.
As governments around the world seek to enhance tax compliance in the cryptocurrency sector, it is crucial for individuals and entities involved in crypto trading to adhere to tax regulations and ensure transparency in their financial activities. The “Ops Token” operation in Malaysia is a step towards combating tax evasion and promoting tax compliance within the cryptocurrency industry.