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DOJ, IRS Target YouTube Star, Others Involved With Crypto Broker SFOX

DOJ, IRS Target YouTube Star, Others Involved With Crypto Broker SFOX

The Department of Justice (DOJ) and the Internal Revenue Service (IRS) are targeting at least ten clients of crypto broker, sFOX, for tax evasion.

Targets include a YouTube star and someone "allegedly involved in a Ponzi scheme." Decrypt.com reported on the ongoing situation, noting:

A California court has given the U.S. Internal Revenue Service permission to issue a “John Doe” summons to prime brokerage sFOX.

If issued, the summons would seek both user identification and transaction records for anyone who completed at least $20,000 worth of transactions from 2016 through the end of 2021.

An official memorandum from U.S. Deputy Assistant Attorney General David A. Hubbert shares additional information about the case that is being built, including the fact that "Agent Lee has conducted an investigation and identified specific individuals who held accounts with sFOX and may have failed to comply with their tax reporting requirements under the internal revenue laws."

The memo contains details specific to some of these individuals, including the fact that Taxpayer 1 "was allegedly involved in a Ponzi scheme" that utilized funds from the person's personally owned limited liability company (LLC).

Taxpayer 2 is described as a popular "YouTube video creator and online gambler who received cryptocurrency deposits from YouTube subscribers and gambling."

DA Hubbert's report also notes that "sFOX does not make any third-party reports to the IRS of cryptocurrency transactions that occur on its platforms."

This "information gap" is of particular concern to Agent Lee and the FBI since cryptocurrency transactions can be notoriously challenging to trace.

Earlier this year, in fact, a trial date was finally scheduled for another YouTuber, rapper Heather Morgan, and her husband, who pulled off an incredibly shocking Bitcoin heist in 2016

As for the current sFOX investigation, the Crypto Times confirms that the broker "itself is not accused of violating any laws in connection with its digital currency business."

It is not yet known when any official indictments will be made against the ten tax filers involved in the FBI and DOJ's investigation.

What do you think about this cryptocurrency tax evasion case?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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