One of the major cryptocurrency exchange Bitfinex has issued notification to some of its user that submission of tax information is required. The notification also stated that the tax information submitted by user may be sent to the British Virgin Island’s (BVI) government. BVI’s government may share the information with tax authorities of the country of residence of the users.
Below is what the notification said:
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
Bitfinex asserted that the move is justified as 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. Bitfinex as per the notification will list various self certification forms for its users, categorising them in individuals or entities, based in US or outside. May 24 is the deadline to submit these forms.
Bitfinex made an extra effort to remind its user about the required submission of desired information as they agreed to adhere to the laws and regulation when agreeing to its terms and conditions.
Bitfinex tweeted on twitter that the message regarding submission of tax information has only been sent to those users who have an obligation to self disclose. The tweet clearly stated that the users who did not receive the message need not comply. Whalepool stood against Bitfinex’s move and advised users not to comply and to withdraw their funds from the exchange.
In connection to this, it is worth mentioning that former New York Attorney General Eric Schneiderman gave cryptocurrency exchanges a two week period to respond to an inquiry regarding Virtual Market Integrity Initiative.