Bitfinex Requires Customer Tax Info which it ‘May Exchange’ with Gov’t, Tax Authorities

Bitfinex has required tax information from its users, which it “may then exchange” with the government and tax authorities of the customer’s country of residence.

Cryptocurrency trading platform Bitfinex has recently distributed a letter to certain users,  saying that they are required to disclose their tax information, which the exchange may share with the government, according to a statement from the exchange on Twitter May 17.

The exchange, which is registered in the British Virgin Islands (BVI), noted that under BVI law it is obliged to report specific information to the BVI government. According to the letter, Bitfinex “may then exchange” the information with tax authorities in concordance with the US Foreign Account Tax Compliance Act (FATCA) and the Organization for Economic Co-operation and Development Common Reporting Standard (CRS).

With the deadline to submit the information set for May 24, customers, according to the notice, must complete self-certification forms depending on whether they’re individuals or entities, and whether they’re residents or citizens of the US:

“If you are a US person (i.e. a US resident, a US citizen, or an entity organized in the United States), or an entity with at least one 25%+ owner who is a US person, please complete the appropriate FATCA form. Otherwise complete the appropriate CRS form.”

The message was confirmed by the Bitfinex Twitter account after the exchange’s new policy was brought to light by cryptocurrency commentator Whalepool:

“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 need _not_ self-certify anything to us at this time.”

Bitfinex was founded in 2012 and is headquartered in Hong Kong. At a market capitalization of $686 mln, it is the fourth-largest cryptocurrency exchange globally, trading 77 different digital assets.

Last month, Bitfinex fell under the “Virtual Markets Integrity Initiative”, an “inquiry into the policies and practices” of crypto trading platforms launched by then-New York Attorney General Eric T. Schneiderman. As part of the program, the exchange was sent a letter, asking them to provide information on operations, internal controls, and other key issues in order to protect cryptocurrency investors and users.

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Twitter CEO Jack Dorsey Reaffirms Bullish Future on Bitcoin, Crypto as Global Payment

Twitter and Square CEO Jack Dorsey expressed enthusiasm and hope that cryptocurrencies will be adopted globally as a means of payment.

Twitter and Square Inc. CEO Jack Dorsey expressed optimism about cryptocurrency’s role in the future of payments, saying that “the internet deserves a native currency” and “it will have a native currency,” Bloomberg reports May 16.

At the Consensus conference on Wednesday, Dorsey shared crypto enthusiasts’ vision that virtual currencies are the future of a legitimate means of global payment. He said that he doesn’t know whether it will be Bitcoin (BTC), but “I hope it will be.” Dorsey said:

“This technology is a fundamental shift to our world and can have so many positive outcomes. We have to do the work to educate regulators and educate the SEC why this technology is important.”

Square, a developer of payment and financial services solutions, allowed merchants to accept BTC in 2014 and made BTC trading available for almost all users of its Cash App in February of this year.

Not everyone at Square shares Dorsey’s enthusiasm however. He said that “this was a pretty contentious move in the company,” adding that there are still debates and fights over the topic. According to Dorsey, some of the company’s board of directors are also resistant to the idea of cryptocurrency.

In the beginning of May, Square reported low profits from BTC trading in the first quarter, which only amounted to around $200,000. While BTC trading constituted a 5 percent overall revenue of $34.1 mln, the company spent $33.9 mln to purchase the tokens.

Dorsey’s recent speech reaffirms previous comments that Bitcoin will become the world’s “single currency” within a decade. He said:

“The world ultimately will have a single currency, the Internet will have a single currency. I personally believe that it will be Bitcoin.”

Dorsey noted that, at the moment, Bitcoin is “slow and costly,” which makes it difficult to use as a medium of exchange. He added that “as more and more people have it, those things go away.”

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