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Bitfinex Exchange Asks for Customers’ Information: Tax Regulations on the Loose

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Bitfinex makes up for one of the largest and most popular exchanges among the crypto investors, also making the largest exchange by trading volume in accordance with CoinMarketCap. However, there have been some sayings that certain customers were asked to require a certain set of personal information, as indicated in the emails sent by Bitfinex exchange. On this occasion, Bitfinex explained that they are planning on sharing the mentioned information with the authorities in the British Virgin Islands, all in accordance with the local law and due to a fact that Bitfinex is actually based in this specific location.

Bitfinex Asks for Personal Data

The information appeared as provided by a portion of Bitfinex customers, that Bitfinex exchange has sent emails to some of their customers where they have stated that they are not asked, but “required” to provide a certain list of personal information.

On this occasion, the exchange explained that they are planning on sharing the requested data with the British Virgin Islands, as in accordance with the local law and the fact that the mentioned exchange is based in the British Virgin Islands.

Bitfinex stated further in the mentioned emails that the messaged customers should be able to provide their information as per request by May 24th the latest, which is 5 days away from the time of this writing.

It was further stated that Bitfinex is not specifically requesting that information for the government of the British Virgin Islands for tax purposes, but that the government may decide to send that information to the government of the emailed customers.

The Bitfinex exchange has also clearly stated in the email that was sent to a certain group of customers, that they are obligated and pursuable by the law of British Virgin Islands to ask that sort of information from their customers and that they are legally bound to provide it in accordance with the mentioned legal pursuance.

And what if those customers would refuse to do so?

What if those customers have decided to use blockchain-based currencies in order to keep their transactions and trades private, whilst their exchange of choice is now legally bound to provide that information to the authorities that are then entitled to provide that data to the tax authorities of the chosen customer’s country of residence?

Then Bitfinex has something more to add: Bitfinex is reminding their customers that they are as well legally bound to provide the required information as requested by the government of British Virgin Islands, as they have agreed to all terms and policies by accepting the agreement, which was a part of the process of account making.

As all customers have agreed to use Bitfinex in accordance with applicable laws and regulations, all asked parties are legally bound to provide the requested information and fill out the forms that were initially provided in the mentioned emails.

If the mentioned customers are to fail in doing so, Bitfinex is then entitled of legally pursuing each customer, as they have broken the agreement of terms of services, which makes this group legally vulnerable in this case.

Bitfinex Responds

Bitfinex made sure that the panic is not being spread across the community, so their team tweeted about the mentioned case. Bitfinex exchange stated in the initial tweet that only the customers that have received the email are to respond to the request.

They further added that they have not sent the mentioned emails to all of their customers, but only to a significant portion of Bitfinex users that were targeted simply because they are further asked to make self-certifications.

Although the panic was probably stopped from being spread further, Bitfinex didn’t provide detailed info about why the British Virgin Islands asked for the requested information, so it is not yet certain whether the picked customers would be surpassed to the tax authorities in their country of residence.

Some customers based in the US were also asked to provide this information by the request.

It is not hard to guess that the crypto community didn’t welcome this news. Moreover, this is also not the first time that Bitfinex is being linked to scheme-like cases.

If we go a little while back, Bitfinex was also once accused of using Tether for pumping the price of other currencies. Given the fact that Tether and Bitfinex are sharing a mutual CEO, the allegations had strong arguments backing them up.

It is also not hard to guess why Bitfinex decided to try and move its base from the British Virgin Islands, where it is currently located to Switzerland. Switzerland might be a better choice for this exchange, as this country is considered to be a tax paradise.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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