Bitfinex asks customers for personal info to turn over to authorities as required

Bitfinex, one of the largest and most popular exchanges among the crypto investors, has asked customers for personal information, to share it with the authorities in the British Virgin Islands, all in accordance with the local law and due to a fact that Bitfinex is actually based in this specific location. In a notice sent out to clients, Bitfinex said that clients must  send in their tax information so that it will, in turn, give it to the British Virgin Island authorities who will share the same data with relevant tax authorities or governments of its users’ country of residence.

“Under the laws of the British Virgin Islands (which are applicable to entities organized in the British Virgin Islands, including us), we are required to report certain account information to the [British Virgin Island] government,” the notice read, adding “The government of the [British Virgin Island] may then exchange that information with the tax authorities of the customer’s country of residence.” As all customers have agreed to use Bitfinex in accordance with applicable laws and regulations, all asked parties are legally bound to provide the requested information and fill out the forms that were initially provided in the mentioned emails.

If the mentioned customers are to fail in doing so, Bitfinex is then entitled of legally pursuing each customer, as they have broken the agreement of terms of services, which makes this group legally vulnerable in this case. Some customers based in the US were also asked to provide this information by the request. The notice further states that in addition to complying with the British Virgin Islands, the move is also consistent with the U.S Foreign Account Tax Compliance Act and the Organization for Economic Co-operation and Development Common Reporting Standard . As such, all clients, whether individual or corporate bodies, must fill in and submit the FATCA and CRS forms by May 24, 2018.

Coinbase and the United States Internal Revenue Service (IRS) have disagreed over what information must be provided regarding clients. In 2016, the IRS issued a summons to Coinbase, directing the cryptocurrency exchange to reveal customer information. The IRS wanted information on all Coinbase customers who had bought Bitcoin in the period between 2013 and 2015.

By January 2017, Coinbase was hoping to reach n agreement with the IRS.

Bitfinex has since stated that it only sent the letter to a select group of clients who “have an obligation to self-disclose,” adding that all those who did not receive the notice are not obligated to do anything about it.

Jeffrey Newman represents whistleblowers