Bitfinex:a tax haven-based exchange to help collect tax
On May 17th, Bitfinex released a post requiring tax information from its users to report to BVI government, including individual taxpayer identification numbers and their social security accounts, data from which can be used to collect tax on users’ cryto income.
Soon after the announcement was posted in Bitfinex KYC, users of the exchange express their opposition by calling for a boycott on Bitfinex on social media. Users of Whale pool , a crypto community of day traders resist the decision by getting their money back from it.
Actually, British Virgin Islands, where the exchange registered in, is renown for being a tax haven where people or enterprise have no need to pay for capital gains tax, gift tax or sales tax etc. Therefore, it is rather controversial for a company which settled in a “tax-free”island to reduce cost, is help the authority to collect tax. What’s more the reason why people turns to crytocurrency market is it allow them to deal with others without leaving personal information, in other words, trade can be anonymous and user can be invisible. How does the transaction still be that anonymous if users leave their person information. Then, what’s the difference from traditional forms and the cryto one? It’s originally built to avoid those procedures.
What’s more the decision also led to sudden slump in Bitcoin market value.
The time when Bitfinex released announcement, the market saw a sudden slump in Bitcoin market value. At the moment, the value of 1 Bitcoin declined to $7925, a 2-month-low.