British Authorities (HMRC )Seek Data from Crypto Exchanges

[Herbert2020]

Following USA now UK HMRC contacted exchanges for users data.

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.

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[buwaytress]

They could be opening a big can of worms, as I believe a lot of so called traders are actually losing money

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...

[eaLiTy]

First world countries like USA, UK etc are efficiently regulating the crypto environment in this manner, but I cannot the same about third world countries like India etc. They have no clue as to how to properly regulate crypto and instead focus on banning it completely.

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.

are you currently paying taxes for your crypto in UK? If you simply purchased crypto in an exchange for example coinbase and then moved the crypto to a hardware wallet etc, do you need to pay taxes?  If no, how do you convince taxman that you simply transfered from one account to another of yours rather than selling?

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.

[Steamtyme]

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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.

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

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 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.

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.

[malevolent]

The question is if crypto exchange should answer to HMRC?

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.

[mazdafunsun]

Following USA now UK HMRC contacted exchanges for users data. They contacted Coinbase, eToro and CEX.IO.  

are you currently paying taxes for your crypto in UK? If you simply purchased crypto in an exchange for example coinbase and then moved the crypto to a hardware wallet etc, do you need to pay taxes?  If no, how do you convince taxman that you simply transfered from one account to another of yours rather than selling?

Thanks

Source: https://www.coindesk.com/british-tax-authority-seeks-customer-data-from-crypto-exchanges-in-search-of-tax-evaders

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.

[Nolimitz84]

If no, how do you convince taxman that you simply transfered from one account to another of yours rather than selling?

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.

[redsun114]

Following USA now UK HMRC contacted exchanges for users data.

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 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.

[The Cryptovator]

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.

[mazdafunsun]

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.

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.