A crypto exchange Bitfinex, famed for its opaque banking arrangements, has started ordering its users to submit their tax details. The platform, which is registered in the British Virgin Islands, a known tax haven, will retain this information and may share it with tax authorities in their customers’ jurisdiction.
The exchange has sent an email to a portion of its users, in which it has outlined a new KYC policy. Besides the identity and location of its customers, it now wants their tax details. It has been stated that this is to accord with local laws in the British Virgin Islands (BVI) where Bitfinex is registered. The platform’s tax data gathering won’t stop there however: it notes that the BVI government «may then exchange that information with the tax authorities of the customer’s country of residence».
A few months ago, Bitfinex didn’t even enforce basic KYC for its clients. It’s now gone from being one of the laxest major exchanges to one of the most regimented, with a tax sharing policy. After Bitfinex’ new policy was called out on Twitter, the exchange clarified its position, explaining:
«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».
There appears to be an inference, however, that all users will eventually be obliged to comply.
A number of Bitfinex users have stated their desire to boycott the platform and take their trading elsewhere. Many feel that Bitfinex’ latest policy, regardless of its legal basis, is a step too far.