British tax agency

UK Crypto investors on alert as British tax agency demands customer data

The British tax agency HM Revenue & Customs (HMRC) has demanded customer and transaction information from cryptocurrency exchanges. It has sent out official letters to several exchanges based in the UK requesting customers’ names and transaction histories.

The HMRC wants the information so that all the crypto transactions can be tax classifiable. Therefore, it will directly fall under tax regulation. It seems unlawful on the surface to request this information from crypto exchanges. However, it’s important to note that UK regulation does have a section indicating the responsibility of crypto companies to be transparent. The regulators can once request data from these exchanges.

It will be a difficult task to collect information of all the users from the past 10 years. It looks like the British tax agency will only go 2-3 years back. Thus, this will not affect individuals who went into crypto early on in 2012-13. This also implies the ones who probably made the largest gains will remain unaffected. Therefore, it will be the people who came in around the time crypto peaked. As per the source, the letter is also sent to major crypto exchanges such as Coinbase, eToro, and CEX dot IO.

Notably, in countries like Israel, the banks refuse to accept any money from crypto deposits. Thus the investors are facing a hard time to pay their taxes in the country.