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Bitfinex Forces Users to Submit Tax Information, May Share with Government

Last Updated March 4, 2021 5:07 PM
Francisco Memoria
Last Updated March 4, 2021 5:07 PM

Major cryptocurrency exchange Bitfinex has recently notified  some of its users that they are required to submit their tax information so the company can then send it over to the British Virgin Island’s (BVI) government, which “may” exchange the info with the tax authorities of its users’ country of residence.

The exchange’s message reads:

“The government of the BVI may then exchange information with the tax authorities of the customer’s country of residence, consistent with the British Virgin Islands law, the U.S. Foreign Account Tax Compliance Act (FACTA), and the Organization for Economic Co-operation and Development Common Reporting Standard (CRS).”

Justifying its move, Bitfinex noted that under the laws of the British Virgin Islands, the jurisdiction in which the exchange is currently based, it is required to “report certain account information to the BVI government.”

The notice goes on to list various self-certification forms for its users, depending on whether they’re individuals or entities, and whether they are or aren’t based in the US. Notably, the exchange set May 24 as the deadline to submit these forms, giving users just seven days to comply.

At the end of the message, Bitfinex reminded its users they’re required to hand over such information, as they agreed to comply with applicable laws and regulations when agreeing to its terms of service.

The cryptocurrency exchange revealed on Twitter , when Whalepool shared its request with its over 36,000 followers, that it only sent the message to users it believes “have an obligation to self-disclose.” It added that users who did not receive the message were not required to comply “at this time.”

Protesting Bitfinex’s move, Whalepool suggested users withdraw their funds from the exchange to show they don’t agree with what’s being asked of them. It also added in a follow-up tweet  that former New York Attorney General Eric Schneiderman gave cryptocurrency exchanges a two-week period to respond to an inquiry regarding its Virtual Market Integrity Initiative.

Schneirderman’s move, as covered by CCN.com, saw Kraken CEO Jesse Powell use strong words against the now-disgraced former AG, as he saw the inquiry as “insulting,” arguing it didn’t show “basic respect.”

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