An exchange famed for its cloudy banking arrangement, Bitfiex has started instructing its clients to share their tax data. The exchange is a British Virgin Island registered company, whereby the British Virgin Islands which is known as a tax haven will obtain this details and might even share it with tax regulators in their client’s jurisdiction. The news has spurred a lot of controversies.
Tax Details wanted by Bifinex
Bitfinex has outlined a new KYC policy, in an email issued to a portion of its user. The firm wants its clients’ details as well, not stopping at just requesting the client’s location and identity. It has been reported that this is to comply with British Virgin Islands (BVI) local laws, “where the exchange is registered” according to NewsBitcoin.com. The data gathering of the platform would not cease there, but it states the government of BVI “may then exchange that information with the tax authorities of the customer’s country of residence.”
Bitfinex did not even impose basic KYC for its users, up until a few a months ago. Furthermore, with a tax sharing policy that surpasses anything ratified such as Coinbase or Bittrex, it is now gone from being one of the latest major exchanges to one of the most regimented. The exchange made clear of its stance after Bitfinex new policy was called out on twitter stating that, they have targeted users that they believe have an obligation to self-disclose and they did not send their message to all users, according to NewsBitcoin.com. In addition to the above, the firm emphasizes that a client is not required to self-certify anything to them currently, even if a client has not received a message from them, as reported by NewsBitcoin.com. There seems to some interruption but gradually every client will be obligated to abide by.
Preparing for Boycott are Bitfinex Users
Expected, is the amount of Bifinex Clients have noted their aspiration to take their trading elsewhere and boycott the platform. Cryptocurrency users are already among the most strongly criticize investor in the world, due to increased regulation, alongside the transparency that is inherent to blockchain technology. Regardless of its legal basis, many feel that Bitfinex’s latest policy is a step too far. The irony of Bitfinex now wanting to audit its customers is not lost, coming from an exchange synonymous with operating out of tax haves and failing to fully audit its Tether stablecoin.