The world’s largest cryptocurrency and Bitcoin exchange Bitfinex asked its users to submit tax IDs and social security numbers. The identities are used by government agencies of the country and ensure safety to its customers. Basically, Bitfinex is a popular cryptocurrency exchange which is registered in the British Virgin Islands. This place is called as a tax haven and the business is registered to gain more profits.
On 17th May 2018, Bitfinex requested its customers to submit their identities, it sent mails to some of their customers where they have list of personal informations. The email states as follows
British Virgin Islands laws
Under the rules and regulations of British Virgin Islands, customers are required to report certain account information to the BVI Government. Bestowing to BVI Laws, they are required to gain self-certifications from the customers in order to divine customer’s tax residence. The authorities request customers to complete appropriate self-certification form and upload it to Bitfinex account by the end of May 24 2018. The customers are required to provide the all the information.
A community of day traders named Whalepool have focused on Bitcoin and other cryptocurrencies on Bitfinex. It underscores that it strongly disowns the decision of Bitfinex and has withdrawn their funds from the exchange.
The Whalepool team says that “Bitfinex requires users to provide their tax information which can be send to BVI. It will exchange to the country’s tax authorities. If customers disagree with the decision taken by the exchange, they can peacefully protest by withdrawing the money from Bitfinex.”.
Bitfinex responses to the statement of Whalepool and says that it is targeting users who have an obligation to self-disclose and emphasized on the portion of the Bitfinex user base. The team is asked to disclose their tax identification and personal information.
Tax imposed on cryptocurrency
In the nations like US and France, the capital gains of tax on cryptocurrency investment is quite substantial. The imposed tax on the trading of cryptocurrency is 45 percent that is decreased to 19 percent by France’s Council of State. As high capital tax is imposed on cryptocurrency trading, it is reasonable that investors in the global cryptocurrency market avoid to disclose their tax ID. Basically, it prevents them for being paid to abnormally large tax on traded.
The hasty decision taken by Bitfinex led cryptocurrencies market and investors to trade Bitcoin-to-USD. Majorities of investors still dread to trade their funds out of Bitfinex. The laws are referred to US Foreign Account Tax Compliance Act and the Organization for Economic Co-operation and Development Common Reporting Standard.
Overall, Bitfinex is enhancing their customers to legally bound and provide information as requested by the Government of British Virgin Islands. The people are accepting the agreement which is part of process to make accounts.
Bestowing to sources, cryptocurrency market data provider, Bitfinex is the biggest bitcoin-to-USD-exchange. It has more than 29 percent of share in the market. Earlier, Bitfinex is accused of utilizing Tether for pumping the price of other currencies. As the Tether and Bitfinex are sharing a mutual CEO, the allegations had strong arguments supported it.