Cryptocurrency exchange Bitfinex has announced that the company is required to share customer data with the British Virgin Islands’ (BVI) government, a move that has been a hot topic of debate on social media.
Pursuant to the laws in place in the BVI, Bitfinex is required to report a “certain account information” to the BVI government, something that was always the case, but likely not enforced until now. As the announcement states:
“The government of the BVI may then exchange that information with the tax authorities of the customer’s country of residence.”
As the announcement states, this is consistent with the U.S. Foreign Account Tax Compliant Act (FACTA). It’s possible that pressure from increasingly more organized U.S. regulators is behind the announcement, which Bitfinex likely wouldn’t have opted for voluntarily taking into account the predictable community backlash, which has been swift and strongly worded.
Bitfinex is now requiring users to give their tax information so that it can send it to BVI which will exchange it with your country's tax authorities.— Whalepool (@whalepool) May 17, 2018
We strongly disavow.
If you also disagree with this decision, peacefully protest it by withdrawing your money from Bitfinex pic.twitter.com/VkYchg3sqg
Hundreds of people liked the idea of a protest and boycott on that tweet alone, and similar sentiments have been echoed throughout libertarian elements of the community who have turned to crypto as a means of governing themselves and their own finances.
To many, this is an ideological issue, and the ramifications may well reach beyond the Bitfinex incident and serve to stir up debate among the diverse community of enthusiasts, investors, and anarchists among other factions about what purpose cryptocurrencies are destined to serve.
Users have until May 24. 2018 to comply by submitting the stated documents (FACTA self-certification form in the case of U.S. citizens). Bitfinex ended the announcement with a reminder that users had technically already agreed by signing up to comply with laws and regulations such as this one.