New Zealand's tax authority asks crypto firms to turn over customer info

[TrevorS]

New Zealand’s tax agency has requested that crypto firms in the country share their customers’ personal details and cryptocurrency asset values.

According to a statement from the Inland Revenue Department (IRD) issued to Radio New Zealand, the agency has requested this information in order to enhance its understanding of the crypto-asset environment in the country, so that it can know how best to help taxpayers meet income tax obligations.

The move comes at a time when tax regulators around the world are tightening their grip on the cryptocurrency market.

Janine Grainger, chief executive of New-Zealand-based Easy Crypto, told Radio New Zealand that the IRD must be widening its net of the tax base because crypto-asset ownership is growing in New Zealand. Grainger called the move a “heartbreaking” breach of privacy and autonomy.

https://www.theblockcrypto.com/linked/79008/new-zealands-tax-authority-asks-crypto-firms-to-turn-over-customer-info

[BitcoinGirl.Club]

Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
1. Compromising their privacy because these exchanges will ask your KYC at some point
2. Risking of losing fund from a hack.

Now when government agencies ask for clients details then it is worse. We really need more people to be in crypto so that we can find available people in our local area or even in the shops where people can exchange their crypto openly without losing their privacy and risking to keep their coins to a vulnerable area.

[Twinkledoe]

Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
1. Compromising their privacy because these exchanges will ask your KYC at some point
2. Risking of losing fund from a hack.

Now when government agencies ask for clients details then it is worse. We really need more people to be in crypto so that we can find available people in our local area or even in the shops where people can exchange their crypto openly without losing their privacy and risking to keep their coins to a vulnerable area.

Government will find a way how to tax crypto users if they started to ask the details from exchanges. And these exchanges have no choice but turnover their clients' details or else, they will lose their business license. This will be one bottleneck of adoption, because a lot of crypto users want to avoid this hefty tax and then if the govt will start asking those info, then, people may think twice of using crypto.

[GreatArkansas]

Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
(....)

For sure this can be some centralized trading exchange. Where a lot of people using right now. I am also curious what the crypto firms owners will do to their customer once at the beginning or some users sign up on their platform and on their Term Of Services, there is no yet Know-Your-Customer (KYC) Policy, but later on they will required all the users new or old to submit one.
So for this, the fund will be freeze. I also tried this before on one exchange, I needed to submit a KYC first before I can withdraw my Bitcoins.
That's why Decentralized Exchanges are much more advisable to use now.

[BitcoinGirl.Club]

That's why Decentralized Exchanges are much more advisable to use now.

Decentralized exchange is a solution but with Bitcoin how the community will do it? I am an old school tech guy with not much knowledge about crypto technical side. In the chain how are they going to exchange all these altcoin and also how would they control the onchain fees?

Big question to ask is that is it really possible to have a decentralized exchange where one can exchange their bitcoin for an altcoin? Is it technically possible?

[so98nn]

And that’s how history will tell we lost the battle against government authorities.

Come on, this is completely insane if they do listen to government and give away the privacy data like that. First things first, it will compromise the very nature of crypto atmosphere and that’s “decentralised work mode”. This will surely disrupt the confidence of big investors though.

However, if they have mentioned in their terms and conditions that personal information will be kept secure and will not be shared to any other party then they could just file petition against Inland Revenue Department and may refuse to do so.

This could be best save.

[mk4]

This is just again one additional reason on why people should mostly prevent using custodial KYC exchanges. Like come on people, try out non-custodial P2P exchanges like HodlHodl[1]!

[1] https://hodlhodl.com/

[pooya87]

i don't see a problem here that needs a solution such as using DEX to evade paying taxes. those who see bitcoin as a cash cow must also pay their cash tax too. in fact those countries that have already accepted bitcoin as a currency and have removed taxes on using bitcoin as a currency also have high taxes on traders who are just using bitcoin to make cash profit.

[davis196]

Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
1. Compromising their privacy because these exchanges will ask your KYC at some point
2. Risking of losing fund from a hack.

Now when government agencies ask for clients details then it is worse. We really need more people to be in crypto so that we can find available people in our local area or even in the shops where people can exchange their crypto openly without losing their privacy and risking to keep their coins to a vulnerable area.

We can't compare government agencies to hackers and crypto exchange platforms KYC.
It's OK for the goverment to ask you about your financial status and all the assets you possess.The problem is how good the government agencies are at keeping this private info safe and preventing data leaks.
If the New Zealand's tax authorities want to help,that's fine,New Zealand is one of the best countries in the world,in terms of living standard and business environment.

[Poker Player]

I think the issue here is that mass adoption is not going to go hand in hand with anonymity. If crypto is to be mass adopted, most users are going to be identified by governments. There always be some people using decentralised exchanges and escaping from Governments' control but just the same way as most cash transactions are declared and there are a percentage of them that escape from Governments' hands.

[avikz]

New Zealand’s tax agency has requested that crypto firms in the country share their customers’ personal details and cryptocurrency asset values.

According to a statement from the Inland Revenue Department (IRD) issued to Radio New Zealand, the agency has requested this information in order to enhance its understanding of the crypto-asset environment in the country, so that it can know how best to help taxpayers meet income tax obligations.

The move comes at a time when tax regulators around the world are tightening their grip on the cryptocurrency market.

Janine Grainger, chief executive of New-Zealand-based Easy Crypto, told Radio New Zealand that the IRD must be widening its net of the tax base because crypto-asset ownership is growing in New Zealand. Grainger called the move a “heartbreaking” breach of privacy and autonomy.

https://www.theblockcrypto.com/linked/79008/new-zealands-tax-authority-asks-crypto-firms-to-turn-over-customer-info

It will eventually become a norm around the globe in next few years. It is a part of the mass adoption that we all are hoping for and the mass adoption will not happen without sharing the data with tax authorities. If we want to see organic growth of crypto, then tax authority will surely ask for the customers' data from the crypto companies. People who call it heartbreaking may have some hidden agenda behind their cryptos but for people who are using cryptos in a legal way, they wouldn't find it problematic at all.

Don't forget that New Zealand has seen a very serious terrorist attack in 2019 where the terrorist Brenton Tarrant reportedly had used cryptocurrency to buy guns for the attack. So it's no wonder that New Zealand tax authorities are taking the matter seriously!

[pooya87]

Don't forget that New Zealand has seen a very serious terrorist attack in 2019 where the terrorist Brenton Tarrant reportedly had used cryptocurrency to buy guns for the attack. So it's no wonder that New Zealand tax authorities are taking the matter seriously!

the government and the revenue office use these excuses to push their laws but it is never because of it. anybody who wants to do anything illegal would either use good old reliable cash or buy their crypto over the counter. those who use exchanges are traders and tax laws only affect them not the criminals.

[rexxarofmoknathal]

Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
1. Compromising their privacy because these exchanges will ask your KYC at some point
2. Risking of losing fund from a hack.

Now when government agencies ask for clients details then it is worse. We really need more people to be in crypto so that we can find available people in our local area or even in the shops where people can exchange their crypto openly without losing their privacy and risking to keep their coins to a vulnerable area.

I agree with the above that having the government asking for customer details defies the entire purpose of crypto handlers being anonymous. It is a concerning matter indeed, and one which I'm not so sure how it will play out if there will be a real push for this, consequently leaving exchanges with two options either agreeing to this and risk losing customer or losing the authority to run in that country.
It is a tough one for sure.

[BitcoinGirl.Club]

with two options either agreeing to this and risk losing customer or losing the authority to run in that country.
It is a tough one for sure.

None of these are going to happen. It's not easy to pick a fight against a government agency so exchanges will just agree with them and will handover what they will ask from them. Users also have no option but to hand over their KYC because they can not exchange their coins whenever they need to.

The only possible way I see is more adoption of crypto. Think about a village where everyone is into bitcoin and other cryptocurrency. If they want need an alt for their btc then they can call someone who lives few blocks away from their home and can exchange it, if anyone needs to buy their groceries they can pay using crypto, they can pay tax using crypto, rent using crypto, they can use crypto in their everyday life. Things will be much more easier.

[Lucius]

Nothing strange in these decisions, so the US IRS asked for a similar thing from Coinbase, and more than 2 years ago something similar happened in Spain. It is logical that no one can use something decentralized like Bitcoin through structures that are centralized (banks and crypto exchanges) and must always respond to every request of the country in which they operate.

If we take into account that countries are always the most accurate and fastest when it comes to tax collection, sooner or later all countries will look for ways to collect taxes from people who use cryptocurrencies.

[antonytar81]

China also took measures to allow them to identify the owners of cryptocurrencies.
This is not a surprise because China is the country where the majority of global bitcoin transactions occur. To reduce the number of illegal bitcoin transactions, the Chinese government introduced rules requiring local Bitcoin traders and exchanges to comply with the new Regulatory policy of the Central Bank of China, which requires KYC Bank accounts to be verified. As a result, users of bitcoin exchanges are formally required to provide certain information related to their Bitcoin transactions, such as account information, registration data, clarification of sources of funds, and transaction history.
Some countries are trying to implement voluntary reporting, but personally, I don't think that this is could be a way to go.

[kryptqnick]

New Zealand’s tax agency has requested that crypto firms in the country share their customers’ personal details and cryptocurrency asset values.

According to a statement from the Inland Revenue Department (IRD) issued to Radio New Zealand, the agency has requested this information in order to enhance its understanding of the crypto-asset environment in the country, so that it can know how best to help taxpayers meet income tax obligations.

The move comes at a time when tax regulators around the world are tightening their grip on the cryptocurrency market.

Janine Grainger, chief executive of New-Zealand-based Easy Crypto, told Radio New Zealand that the IRD must be widening its net of the tax base because crypto-asset ownership is growing in New Zealand. Grainger called the move a “heartbreaking” breach of privacy and autonomy.

https://www.theblockcrypto.com/linked/79008/new-zealands-tax-authority-asks-crypto-firms-to-turn-over-customer-info

The excuse of understanding the environment is quite weak because it obviously doesn't require names and other info to understand the general tendencies (anonymized data on financial flows would suffice). But if crypto firms collect this data anyway, then providing it to the IRD is not a big step forward. It's another thing if the firms don't ask for KYC, but will now be required to do so on a whim of the institution... I hope they'll reconsider this move and find compromise with the environment they allegedly want to grasp. Income taxes sound fair, but only if the legislation requires them being paid when earning income in crypto and if there're good reasons to believe many are not paying them.