Bitfinex Demands Tax Info That Can Circulate to Other Country’s Tax Authorities

One of the world’s biggest cryptocurrency exchanges, Bitfinex, has announced that it requires users to give their tax information so that it can send it to British Virgin Islands (BVI) which can then exchange it with the customer’s country's tax authorities.

This message was sent to users of Bitfinex, but it was confirmed by the Twitter account of Bitfinex that they were deliberately targeting users that they believed had an obligation to self-disclose for tax reasons.

What they say

Bitfinex’s message was brought to light by well-known cryptocurrency commentator, Whalepool. The message outlined that Bitfinex is required to report certain account information to the BVI government.

Furthermore, they explained that the information gathered can then be exchanged with the tax authority of the customer’s country of residence. The message then goes on to say that:

“Pursuant to BVI law, we are required to obtain self-certifications from our customers in order to ascertain each customer’s tax residence.”

Bitfinex is now requiring users to give their tax information so that it can send it to BVI which will exchange it with your country's tax authorities.

We strongly disavow.

If you also disagree with this decision, peacefully protest it by withdrawing your money from Bitfinex pic.twitter.com/VkYchg3sqg

— Whalepool (@whalepool) May 17, 2018

Specific targeting

In response to WhalePanda's tweet, in which they state that if anyone disagrees with this, that they should “peacefully protest it by withdrawing your money from Bitfinex,” Bitfinex admits it is a targeted message.

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.

— Bitfinex (@bitfinex) May 17, 2018

Part of the issue is that the requirement, which was just sent to specific users, demands that the information be supplied within seven days.

Cryptocurrency and tax

Taxation of cryptocurrency has been a sticky issue for some time now as many governments are not sure how to regulate that side of the market. The anonymous nature of the digital currency space makes it difficult to track and register funds and growth.