The 4th largest crypto exchange by 24-hour trading volume, Bitfinex will now be sharing the users’ data with the government of British Virgin Island which is reportedly in lines with US Foreign Account Tax Compliance Act.
Crypto exchange bitfinex to share user data with BVI Govt.
In February, this year, Coinbase shared the data of thousands of its customers with the IRS on the court orders. The exchange has to share the data of those users’ that transacted more than $20,000 through their accounts, that involves taxpayer’s name, ID, address, date of birth and transaction records.
Now, another cryptocurrency exchange, Bitfinex has announced that it is required to share its customer data with the government of the British Virgin Island (BVI).
According to the Coinmarketcap, Bitfinex currently ranks at the 4th spot by 24-hour trading volume. As for the registered location of the company i.e. BVI, it is known for being a crypto tax haven.
This certainly came as a surprise for the users when they received the mail to provide their information as under the new KYC requirement, in order to comply with these laws, the exchange has to provide the info to the government.
As per the announcement:
“The government of the BVI may then exchange that information with the tax authorities of the customer’s country of residence.”
Involvement of internal revenue service (IRS) of US
Reportedly, the move has been taken under the US Foreign Account Tax Compliance Act (FATCA) and the Organization for Economic Co-operation and Development Common Reporting Standard (CRS).
Apparently, the department of the US is extending its reach on the cryptocurrency trading done by Americans on this exchange that comes under the jurisdiction of IRS.
This led to a strong backlash from the community as it became a hot topic of debate on the social media.
The users have to submit all the documents as stated, which in case of US citizens is a FATCA self-certification form. The exchange ended the announcement with the clarification that:
“As a reminder, by agreeing to our terms of service, you have to agree to use the website in compliance with applicable laws and regulations.”
This brings the users with three options, first they can boycott the exchange and move their funds from here. Second, you can wait for the exchange to move to some other jurisdiction or the last one to comply with the requirements.
What are your views on Bitfinex sharing its users’ data with the government of BVI and the involvement of IRS in the same? Share your thoughts with us!