Israel's Tax Authority Is Looking into The Alleged Tax Evasion of NFT Creators

Two NFT developers were detained by Israel's Revenue Authority on suspicion of tax fraud and money laundering after they reportedly failed to declare $2.2 million in sales during 2021.

Avraham Cohen and Anthony Pollack, the founders and operators of the NFT project holyrocknft.com, were recently reported to have been detained for failing to record millions of dollars in earnings from the sale of their digital creations.

The investigation alleges that the defendants have made an undisclosed $2.2 million profit by selling 1,700 NFTs for 620 ETH since 2021. Although the couple did not record these earnings as company earnings, tax authorities consider them as such.

Significantly, the money was laundered by being moved between many digital wallets. The two were given probationary releases from the Jerusalem Magistrate's Court with with orders to turn over their ETH tokens and wallet access codes.

The Holy Rocks NFT project, which was introduced in 2021, gives three-dimensional scanned images of the stones from the sacred location. According to reports, the project's creators testified in court last year to clarify a few misconceptions, such as the claim that they did not scan photographs of the stones at the holy site.