Bitfinex requests tax details from its customers.
Customers of Bitfinex cryptocurrency exchange start to receive notifications to provide information about their tax residency. Bitfinex’ representatives officially confirmed this information.
According to the text of the official notification, the requirement is due to the intention to determine the taxation of customers. This request closely follows the law of the British Virgin Islands, US Foreign Account Tax Compliance Act (FATCA) and the Organization for Economic Co-operation and Development Common Reporting Standard (CRS).
Clients who received the letter must fill in self-certification forms in accordance with FATCA or CRS standards, depending on the country of residence. According to notification, the government of the British Virgin Islands may then exchange that information with the tax authorities of the customer’s country of residence.
However, Bitfinex clarified that not all customers received the letters.
“We have not sent this message to all users. We have deliberately targeted users that we believe have an obligation to self-disclose. If a user has _not_ received a message from us, she need _not_ self-certify anything to us at this time.”
Predictably, some of the customers declared their desire to boycott the platform.
The user Whalepool in his Twitter account urged to withdraw funds from the exchange.
It is worth noting that the news has already caused some alarm, as well as the confusion of users around the world. Bitfinex, known for its far from transparent operations and more than a close relationship with Tether, which never audited its stablecoin and received the regulator’s agenda together with the cryptocurrency exchange, now is going to conduct an audit of its customers.
But it is significant that a few months ago the exchange did not even respect the provisions of “Know Your Customer” (KYC) system. As a result, Bitfinex, which had a reputation as one of the most liberal companies in the industry, unexpectedly joined the ranks of cryptocurrency exchanges with the most stringent rules.
The fact that Bitfinex requests tax details from customers is a policy of exchanging tax information, which surpasses anything that has been implemented by the other exchanges.