Bitfinex asks Customers to Share Tax details for KYC Information

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Bitfinex makes Stringent Regulation Policies Making the Customers Switch to other Trading Platforms

Bitfinex, famous for its non-transparent exchange processes has started to demand its users to provide their tax details. The platform, registered in the British Virgin Islands, a known as a tax haven, will grasp this information and may disclose it to tax authorities in their customers’ jurisdiction. The news has caused a bustle.

Bitfinex issued an email to a portion of its users outlining a new KYC policy. Not satisfied with the knowledge of the identity and location of its customers, it now wants their tax details. This step was taken to accord with local laws in the British Virgin Islands (BVI) where the exchange is recorded. The email also mentions that the BVI government “may then exchange that information with the tax authorities of the customer’s country of residence.”

Until a few months ago, Bitfinex didn’t even impose basic KYC for its users. It’s now gone from being one of the negligent exchanges to one of the most strictly organized, with a tax sharing policy that exceeds anything enacted by the likes of Coinbase or Bittrex. After news about Bitfinex’ new system broke out on Twitter, the exchange resolved the commotion.

The exchange explained:

“We have not sent this message to all users. We have deliberately targeted users that we believe have an obligation to self-disclose. If a user has _not_ received a message from us, she needs _no_ self-certify anything to us at this time.”

There appears to be an assumption, however, that all users will ultimately be required to comply.

However, many of the Bitfinex customers have stated their need to avoid using the platform and take their trading elsewhere. Because of the increased mandatory laws, coupled with the transparency that is fundamental for the blockchain technology, cryptocurrency users are already among the heavily investigated investors in the world. Many believe that Bitfinex’ latest policy, despite its legal basis, is a step too far. Coming from an exchange compatible with operating out of tax havens and failing to audit its Tether stable coin thoroughly, the absurdity of Bitfinex now wanting to check its customers is not lost.

Nishanth Shetty

Nishanth Shetty is a technical writer, author and a crypto-advisor working at Cryptofame. Based in the city of dreams, Mumbai, on the west coast of India. He holds a bachelors degrees from Mangalore University. Nishanth has a myriad experience of technical writings for tech brands. His interests include technology, travel, and food.