Crypto tax evasion cases are on the rise: Bloomberg

In a call with reporters Monday, division chief Jim Lee said that crypto-related tax evasion cases are mounting

article-image

Rob Crandall/Shutterstock modified by Blockworks

share

The Internal Revenue Service’s Criminal Investigations Unit is seeing an increase in its caseload of crypto tax cases, according to Bloomberg.

Bloomberg cited a reporter’s call with division head Jim Lee, during which he disclosed that the investigations range from failures to report capital gains to purposeful withholdings of crypto ownership disclosures. 

Three years ago, Lee reportedly said the majority of cases were focused on money laundering. Now, roughly half are tax related.

The tax agency’s investigations unit was just one of the agencies aiding in the Binance probe, which led to a $4 billion settlement. 

Read more: Here are the details of Binance and Changpeng Zhao’s plea deal

As part of the settlement, Binance not only agreed to pay the billion-dollar sum but the exchange also pleaded guilty to the failure to comply with registration requirements and operating as an unlicensed money transmitting business. 

Former CEO Changpeng Zhao pleaded guilty to violating anti-money laundering violations. He has, as part of the settlement, resigned from his role as CEO and faces a February sentencing.

The company still faces a lawsuit from the US Securities and Exchange Commission alleging that it commingled funds and offered unregistered securities. 

“Our team of investigators uncovered that Binance disregarded anti-money laundering [know-your-customer] laws, failed to register as a money transmitter, and willfully violated US sanctions tied to the International Emergency Economic Powers Act,” Lee said in November following the settlement announcement.

Aside from the investigations, the IRS is currently working out its crypto framework. In October, it extended its tax rule comment period following lots of public feedback. Coinbase weighed in on the proposed rules, with its head of tax criticizing the proposed rules. 

“The proposed regulations, as written, would impose an incomprehensible and unduly burdensome set of new reporting requirements,” Coinbase’s Lawrence Zlatkin wrote at the time

Lawmakers on Capitol Hill pushed the agency to speed up its crypto tax rules, which were first introduced back in August.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The DeFi Education Fund has ideas on how the crypto-friendly SEC can bring Commissioner Peirce’s vision to life

article-image

“Be prepared to do more with less,” Framework Ventures’ Michael Anderson said

article-image

Q1 may have been “frustrating,” but things are looking brighter for Q2

article-image

Tokens worth 20% of the current supply of the TRUMP memecoin launched by the president are set to be unlocked tomorrow

article-image

A crypto-industry lawsuit is “moot” now that Joint Resolution 25 has been signed into law

article-image

Fed Chair Powell assured markets that the labor market is in “good place,” dependent on price stability