ConsenSys, the company behind the popular self-custodial crypto wallet MetaMask, has recently denied allegations that it collects taxes from users. In a tweet, the company clarified that the rumors were based on “inaccurate information” resulting from a misreading of MetaMask’s terms of service. It is important to straighten the record: MetaMask does not collect taxes on crypto transactions and has not made any changes to its terms to do so.
The misunderstanding allegedly stemmed from a circulated screenshot of MetaMask terms and conditions that stated the company reserves “the right to withhold taxes where required.” The blockchain company clarified that the section exclusively referred to products and paid plans offered by ConsenSys, such as credit card developer subscriptions by Infura, which include sales tax. This section does not apply to MetaMask or any other products that do not involve sales tax.
The misinformation spread quickly after it was posted on the r/CryptoCurrency subreddit and was shared by some crypto influencers. The backlash from the community is even more understandable since ConsenSys had added some concerning changes to its privacy policy back in November. At the time, it revealed that it would start collecting certain user-provided data, including personal, financial, and transaction information. As expected, the update faced criticism from the crypto community members who expressed concerns about their on-chain privacy.
Reacting to the community outcry, ConsenSys revised its data retention policy, reducing the time they keep user data, such as wallet addresses and IP addresses, to seven days. The company also acknowledged the importance of prioritizing the privacy of MetaMask and Infura users.
Nevertheless, cryptocurrency traders will likely face increasing tax obligations. As reported, US President Joe Biden has expressed his unwillingness to sign a debt ceiling agreement that would benefit crypto traders, stating, “I’m not going to agree to a deal that protects wealth tax cheats and crypto traders while putting food assistance at risk for nearly 1 million Americans.”
The “protections” Biden refers to encompass tax-loss harvesting, a tax planning strategy where traders sell cryptocurrencies that experienced a decline in value to offset capital gains taxes on other investments. This indicates a growing scrutiny on cryptocurrency transactions and financial activity.
While it is evident that MetaMask does not collect taxes from its users, crypto traders ought to prepare themselves for the possibility of higher tax obligations in the coming future. As tax policies evolve, it is crucial for users to stay informed and understand the potential implications of these changes on their crypto activities.
Source: Cryptonews
