Topic: British Authorities (HMRC )Seek Data from Crypto Exchanges (Read 301 times)

Trade anonymously will become much more difficult.
There are very few exchanges which are anonymous trully. Does who you think are anonymous, often are not - Etherdelta and IDEX are contralised now.
The biggest hurdle in your story would be not to trade but to convert to FIAT, all exchanges in all countries will soon be required not only to ask KYC but also monitor your transaction. There are very few ways you can find a way to exchnage crypto to FIAT anonymously.

Is not that sound like centralization? If continue like this then perhaps people's will trade or buy sell illegally so that they could avoid taxes. So they might save taxes. On the other hand people's will never use centralized exchanges who will ask for KYC. Expose KYC means crypto users can't stay anonymous. This isn't really good things for crypto-currency users.

I guess this is what Binance failed to do that has been making them to launch series of attack on the company just to discredit them. I understand that there has been an issue between the Binance exchange and the United states government, which even made them to move their headquarter to Malta, and now we can see clearly as they are even banning the U.S citizens from using their platform because the U.S would want to pock nose into their affairs.

If U.S continues this way, then they had not right to have even slammed that privacy fine on Facebook when they are not that innocent too, how can you be using your veto power to forcefully gather people’s information from where they are safely saved without them authorizing it.

Really interesting question.Apparently, if there was a transfer between their own wallets,you will need to prove somehow that you are the owner and the second wallet.If the tax authorities are really seriously concerned about taking interest from transactions,then residents of these countries will simply need to record their every step somewhere and then submit it to the tax service.But it’s not clear that the commissions will be fixed or depend on the course?In general, at the moment I have more questions than answers.

it should be easy enough, my understanding is that you have to pay taxes only from your gains and you dont have gains if you do not sell.
If they ask , show the the crypto transactions and done.

This is global change, the main reason is that FATF made new guidelines and most of the exchanges will follow. This unfortunately was a logical next step in crypto evolution.

If they have legal presence in the UK, they don't really have much of a choice, do they? Maybe they could delay things at best. For other countries there are international treaties in place.

It's still fairly vague but that's essentially the regulations around dealing with the Gains or losses from holding Crypto. I'm not positive on if day trading is seen differently as income as opposed to an appreciation or depreciation of an asset. The barter thing is also true, the assumption is no different than 2 farmers trading say a tractor for a grain bin. Which I don't imagine will survive as a way to avoid capital gains into the future as further understanding and regulations roll out.

It's been shown that enough platforms will attempt to go above and beyond what governments are seeking to avoid any possible issues down the road. So if it looks like governments want to know exact profit/loss from an exchange, with add-ins like addresses used, or source of coins; they will hand it over without a second thought. It's not a terrible system as long as people are aware of it if they want to keep any of their information or activities private. It will help people in the end to follow the tax laws of their country, and not receive a nasty notice at some point down the road.


Well they get their money one way or another, unfortunately when one side is already paying/bribing they then have time to squeeze the little guy. I guess as long as you can keep up on the legal requirements and pay taxes appropriately it should be no worry.

The issue with India and the governance is that they have no clue on how to handle the market, they already opened the can of worms at Jet mentioned by banning all the exchanges that were complying with the normal standards and majority of the exchanges are shut down because the RBI restricted the banks from dealing with them and now P2P exchanges are the way to go for now. They would have done the right way by incorporating things the right way.

You pay taxes for your profits and not for holding your assets, it is the same rule as stock markets and you can just provide all the purchases you have made and the assets you are holding.

It shouldn't be much different from IRS or Australian Revenue in this case. Much like online gambling (regulated) and as has been precedent in the UK, All losses from trading activity can be declared as tax relief, so in fact there's a lot to gain for traders who lost money... Might end up saving a lot on existing tax commitments.

I don't really know why paying tax, at least in a country that uses the tax well enough, is an issue... But you are right anyway about cans of worms. Better open now than later though...

what exactly do you mean by this?
this is nothing new. ever since government existed and centralized businesses existed that were handling money, the government were intervening in their operations and demanded regulations and also asked for their "cut".
it didn't start with bitcoin exchanges. this has been the case for hundreds of years.

not to mention that these exchanges such as Coinbase (specially since they ar in US) have been already handing over their data to the government agencies, they put up some public front with their lawyers,... but behind the curtains they are working with them.

I think they'll only be targeting the big traders, so the everyday joe can scrape along, and traders haven't been making much in the recent year due to the bear market, so it isn't a big deal.

I'd like to see how many years they will be chasing up. If it's 3-4, I can see a lot of traders losing thousands of pounds, but if it's only a year, I doubt there will be a big issue (due to the bear market).

I agree with Lucius, but I'd like to see how they are able to determine traders from holders, from sellers and other people. It'll be a hard task for sure.

Coinbase will easily hand over the information, but I'd like to see how eToro and Cex deal with these demands.

If they find something that could be to their advantage, even if the laws and regulations years ago weren't correctly translated, they'd do it. As I've said a hundred of times, the government will always find ways to fuck its citizens a thousand times over just to extract money from them in the form of taxes. One trader who made tens of thousands just a year ago and is now suffering heavy losses would still need to pay taxes because he did that feat even when there are no laws stating that the trader is obligated to pay taxes on their crypto gains.


Would the government even consider that though? The more you know..


Well on where I'm at, small fishes are often targeted because the governments and law enforcement themselves protect the big fishes. So yeah, expect that more and more small-time traders would be targeted by this ruling and only a handful of big fishes in the scene.

I find it hard to believe any government would allow for that.


That's very likely, brokerage platforms do it, and even Steam will ask for your information if you sell 200 items a year or something close to that.

More likely it results in a negative for Capital Gains. This should lower your amount of owing taxes depending on the tax system involved. If they tax you on the gain you receive "relief" on the loss. What I would look into more is whether or not they create a barter ruling. If you are using it to buy goods as opposed to cashing out it isn't treated as a capital gain. I'm not sure if that can be used in the case of services offered or not.

There is no money to be made going after small fish. They will hope that a pop-up or notice is enough to convince you to dig and report enough to be close to accurate and compliant. They will be looking into people who move around and trade in the 10's of thousands to millions a year. I wouldn't be surprised if in a few years exchanges were filing tax documents and no longer leaving it up to the customers.

I am not sure that they will have any prove to convince them,they just have to accept their fate and then pay tax for personal deals too. This is going to be the major disadvantage of decentralized exchange that we see here, Now we can see why many people are having issue with KYC  for those who has been asking why people has been against kyc because I already knew that a time will come that tax man will use the data of those who are on some of these centralized exchanges to trace their transactions and use it to bill them.

The people that would suffer this most are people that KYC are compulsory for, like those who are going above a particular amount limit on the exchanges. Not that I am totally against tax, but for those who would not like their transaction to be tax, I think it is high time they embrace decentralized exchanges that would be difficult for the tax man to approach the owner.

It is not easy to avoid taxes, although there are some ways to do it, but the real problems may come later.  I don't know where you live, but in most EU countries tax office check your income and all movable and immovable property, if there is a disproportion between this, it is up to the citizen to prove from where his money comes from, otherwise they will have to pay extra taxes.

For example if my annual income is $30 000, and I am so stupid to cash out some of my BTC (without filing taxes), and buy a new car worth $100 000, then they will catch me sooner or later.

I'm no longer going to trade in q1. I make a profit then... Lose it in q2 normally so I now have to list a gain and then a loss immediately. Which is, as I see it, a waste of a page...

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I'm guessing @leo is right, they're only going to care abouy those plungimg huge amounts into exchanges... Bybthat there are probably people putting much more than the average person is for trading.

My last post was about his and I will repeat once more. Yet one more reason on a never-ending list of reasons to never give KYC. Now they want to hound us down like dogs on the pretence of finding criminals. What a load of shit. Whoever believes this is so gullible. No tax is paid on crypto anyway. If you trading to fiat then well.... Rather stay to the slave currency and continue paying tax.

Btw it is the other way around. You don't have to prove anything. They have to be the ones to prove you are guilty of something. IT will cost too much man power to do all this and its is just empty threats.
This will just cost the tax payer even more and like tax payers want that? They only defending themselves at our expense.

These are registered and/or licensed entities in the UK. I wonder what kind of authority the HMRC has exactly. Will the exchanges just bend over and do what they ask? Or will this be a drawn out legal battle like the IRS v Coinbase case?


Those cases will be ignored. The standard operating procedure here is to take the data from exchanges, compare it to past tax returns, and flag those people who didn't report enough gains. If a case doesn't result in unpaid taxes due, the HMRC doesn't care and won't pursue it.

This was bound to happen, and it is going to be one of those increasing trends that year after year will get more serious and demanding.

In Spain for example, nearly 15K people received a popup message whilst performing their yearly tax declaration using the official software created for those purposes. The message indicated that the tax office knew for certain that the person had performed operations in crypto, reminding them that a 19%-21% range taxation is applicable to their benefits.
The information was obtained via a previous requirement made by the tax office to over 60 banks, exchanges, payment platforms, corporations that admitted operating in BTC and so on.

Another interesting thing to see is this tweet from Kraken (see https://twitter.com/krakenfx/status/1081701788464558080?lang=en), where it shows a chart indicating the number  of law enforcement requirements received per year, and breaks it down by country. UK filed 61 petitions in 2018 (second largest petitionary after US). Spain filed 7. It does not detail if these petitions were for an individual or a large collective, but it shows how things are moving …