Bitfinex, an important cryptocurrency exchange, announced yesterday that they will require the tax information of all traders on its platform as a mandatory requirement to operate. This was known yesterday when Bitfinex sent an email informing their customers about the issue.
Bitfinex is the leading exchange in bitcoin trading volume, trading more than 130 million dollars worth of bitcoin in the last 24 hours. It is the fourth largest exchange in trading volume, according to numbers of Coinmarketcap.
The email sent by the exchange to their customer stated:
“UNDER THE LAWS OF THE BRITISH VIRGIN ISLANDS…WE ARE REQUIRED TO REPORT CERTAIN ACCOUNT INFORMATION TO THE BVI GOVERNMENT…PERSUANT TO BVI LAW, WE ARE REQUIRED TO OBTAIN SELF-CERTIFICATIONS FROM OUR CUSTOMERS IN ORDER TO ASCERTAIN EACH CUSTOMER’S TAX RESIDENCE…WE REQUEST THAT YOU COMPLETE THE APPROPRIATE SELF-CERTIFICATION FORM AND UPLOAD IT TO YOUR BITFINEX ACCOUNT BY MAY 24, 2018 AT THE LATEST…YOU ARE REQUIRED TO PROVIDE US WITH SUCH INFORMATION.”
Bitfinex is registered in the Virgin Islands, and it should comply with Virgin Islands law. The Virgin Islands are classified as a British Overseas Territory, and its laws are heavily dependant on the UK laws, but requiring tax info from customers might seem a little intruding for some.
But it’s strange that such a big change in the Terms of Services has not been announced in the own exchange announcements webpage. The users of the exchange must now submit their information or close their accounts and withdraw their tokens. But this is not the first time that Bitfinex has had to deal with the law compliance issues.
The last December Bitfinex and its sibling company Tether, a company that issues the USDT stable coin, was subpoenaed by the USA financial watchdog, the Securities and Exchange Commission, over the legality and the support of the mentioned stable coin. Maybe for all this, the exchange has expressed their plans to move to Switzerland in the near future, to operate under a more friendly regulatory framework.