🌎 Malaysia IRB Launches “Ops Token” to Combat Crypto Tax Evasion

The Inland Revenue Board (IRB) of Malaysia has launched a special operation named “Ops Token” to address crypto tax evasion and enhance tax administration in the country.

IRB Malaysia Tackles Crypto Tax Evasion

The IRB of Malaysia has teamed up with the Royal Malaysia Police and CyberSecurity Malaysia (CSM) to initiate an operation involving 38 personnel across 10 locations in the Klang Valley. According to sources, 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, enabling them to trace digital assets traded and assess associated profits. The team uncovered instances where entities were established solely for cryptocurrency transactions to evade tax obligations.

The tax authority has clarified that the gathered data will undergo detailed analysis to determine the value of cryptocurrency assets traded and the profits generated. This process aims to reveal the extent of tax evasion previously undisclosed to the IRB.

CEO Datuk Dr. Abu Tariq Jamaluddin emphasized that individuals who engage in cryptocurrency trading in Malaysia must comply with income tax regulations. He urged all parties involved in such activities to declare their taxes promptly at the nearest IRB office to avoid potential compliance penalties.

The execution of this operation aims to boost the nation’s revenue by minimizing tax evasion and improving tax efficiency, thereby bolstering the sustainability of Malaysia’s revenue collection efforts.

Tax Evasion and Regulatory Scrutiny

Cryptocurrency trading has often been linked to cases of tax evasion, prompting calls for more stringent regulations and reporting standards. The collapse of the FTX cryptocurrency exchange, attributed to fraudulent reporting and mismanagement of funds, triggered regulatory crackdowns and heightened scrutiny. This emphasizes the need for transparency and robust financial practices within the cryptocurrency sector.

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

Global Regulatory Challenges

In Nigeria, Tigran Gambaryan, a compliance officer at Binance, was arrested on charges of tax evasion and money laundering. The arrest followed a demand for a $150 million payment in crypto, which Gambaryan interpreted as an extortion attempt. Although Gambaryan was ultimately cleared of the tax evasion charges, the incident highlights the regulatory complexities confronting cryptocurrency exchanges across various jurisdictions.