On May 17, one of the largest exchanges of cripto-coins and Bitcoin in the world, Bitfinex, officially requested users to send tax and social security identification numbers that could be used by government agencies in the countries, and its users are based on registered tax gains in the cryptomoeda market.
"We request that you complete the appropriate self-certification form and send it to your Bitfinex account by May 24, 2018 at the latest. If you are a US resident or an entity with at least one 25% owner who is a US person, please complete the appropriate FATCA form. You are obliged to provide us with such information, "Bitfinex said.
Targeted users
Whalepool, a community of day traders focused mainly on bitcoin and other crypto-coins on Bitfinex, emphasized that they strongly deny Bitfinex's decision and withdrew their funds from the stock exchange.
"Bitfinex is requiring users to provide their tax information so they can send it to the British Virgin Islands, which will exchange it with the tax authorities in their country. We deny it vehemently. If you also disagree with this decision, protest peacefully by withdrawing your money from Bitfinex, "said the Whalepool team.
In response to Whalepool's statement, the Bitfinex team noted that it "deliberately targeted users" who believed it had a duty to disclose and emphasized that only a portion of Bitfinex's user base was asked to disclose its tax identification and personal data.
High taxes on capital gain
In some regions, such as the US and France, the capital gains tax on investment in crypto-coins is quite substantial. Until this month, the tax on gains on the trading of crypto-coins was 45%, which was reduced to 19% by the State Council of France because investors were not willing to disclose their earnings just to be taxed at 45%.
Considering the high capital gains tax imposed on the crypto-currency trade, it is understandable that investors in the global crypto-currency market try to avoid disclosing their tax IDs and prevent them from being forced to pay abnormally high taxes on the negotiations.
Bitfinex's abrupt decision led the crypto-currency market and investors trading bitcoin-to-USD, which is still the majority of investors in the market, causing panic to sell and withdraw its funds from Bitfinex.
According to CryptoCompare, a provider of crypto-currency market data, Bitfinex remains the largest BTC / USD exchange, with more than 29% of market share.
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Source: https://www.bitfinex.com