The Royal Revenue and Customs Service of Great Britain (HMRC) began to request personal data of clients from foreign platforms for trading cryptocurrencies.
In the UK, cryptocurrencies are considered a personal investment, the gains on which must be taxed. Cryptocurrencies obtained as a result of mining, free distribution or as payment for services are also subject to taxation. To ensure compliance with regulatory requirements, HMRC collects customer data from UK marketplaces.
However, London-based law firm Gherson Solicitors said the agency has now begun seeking information from tax authorities abroad, in accordance with international law and the Freedom of Information Act. Criminal lawyer at Gherson Solicitors Thomas Cattee said:
“This may come as a surprise to many, but HMRC collects data internationally, working with regulators outside the UK.”
The British regulator confirmed that the information received includes the names and addresses of all users of cryptocurrency exchanges. This even applies to those clients who have used the services of exchanges only a few times. In addition, HMRC collects data on the number of transactions made and the total digital assets of customers.
Several trading platforms have already provided information for the periods from 2017 to 2019, as well as from 2018 to 2020. These exchanges include the Coinbase platform. However, the agency has now demanded that the platforms provide more detailed data for the same periods.
Financial regulators in the UK are wary of cryptocurrencies, so they are tightening regulatory requirements for the industry. For example, in March, HMRC released an updated guide to taxation of cryptocurrencies, including staking income on networks using the Proof-of-Stake (PoS) algorithm.