Bitfinex, a full-featured spot trading platform for major digital assets and cryptocurrencies that include Bitcoin, Ethereum, EOS, Litecoin, Ripple, etc. has recently demanded that its users should give out their tax details. A platform that is registered in the British Virgin Islands, which is known for being a tax haven. After acquiring the information they need and may share it with tax authorities in their customers’ jurisdiction.
It released an email to some of its users where Bitfinex noted a new KYC policy. Bitfinex does not really mind not knowing the identity and location of its customers but now they are asking for their tax details. It notes that the main purpose for doing this is to abide by the laws of the British Virgin Islands (BVI) because that’s where Bitfinex is registered. The Exchange went on to note that the BVI government may then exchange that information with the tax authorities of the customer’s country of residence.
A couple of months ago, the exchange had nothing like a basic KYC for its customers. Now it is one of the strictest major exchanges after it was known for being very lenient. It also has a tax sharing policy that is better than the likes of Coinbase or Bittrex. Not long after Bitfinex new policy was called out on Twitter, the exchange clarified its position, noting “We have not sent this message to all users. We have deliberately targeted users that we believe have 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. At the moment, the exchange has a little problem, although all user will be obliged to comply in the end.”
Now a good number of Bitfinex customers have already started to snub the platform and go trade cryptocurrency someplace else. This is because of the increased regulation, along with the transparency that is inherent to blockchain technology, cryptocurrency users are already among the most heavily scrutinized investors in the world. However, a lot of people think that Bitfinex’ latest policy the announced is too harsh, even with its legal basis. Bitfinex is known for operating out of tax havens and failing to fully examine its Tether stablecoin, the irony of Bitfinex now wanting to audit its customers is not yet lost.