Do cryptocurrency exchanges implement CRS/FATCA?
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Depends on the type of account. But any redemptions in that year will generally be reported (aggregated).
Well, here is self-explanatory email all Bitfinex users received in May
Dear Customer,
Under the laws of the British Virgin Islands (which are applicable to entities organized in the British Virgin Islands, including us), we are required to report certain account information to the BVI government. The government of the BVI may then exchange that information with the tax authorities of the customer’s country of residence, consistent with British Virgin Islands law, the U.S. Foreign Account Tax Compliance Act (FATCA), and the Organisation for Economic Co-operation and Development Common Reporting Standard (CRS).
You can read more about FATCA here and about CRS here.
Pursuant to BVI law, we are required to obtain self-certifications from our customers in order to︀ ascertain each customer’s tax residence. To that end, we are providing links to the following︁ four self-certification forms:
(1) FATCA self-certification form for individual customers (available here);
(2) FATCA︂ self-certification form for entity customers (available here);
(3) CRS self-certification form for individual customers︃ (available here);
(4) CRS self-certification form for entity customers (available here).
We request︄ that you complete the appropriate self-certification form and upload it to your Bitfinex account (Account︅ > Verification > Manage Documents > Upload New) by May 24, 2018, at the latest.︆ If you are a U.S. person (i.e., a U.S. resident, a U.S. citizen, or an︇ entity organized in the United States), or an entity with at least one 25%+ owner︈ who is a U.S. person, please complete the appropriate FATCA form. Otherwise, please complete the︉ appropriate CRS form.
You are required to provide us with such information. As a reminder,︊ by agreeing to our terms of service (as set out at Bitfinex ), you have︋ agreed to use the website in compliance with applicable laws or regulations.
Dear Customer,
Under the laws of the British Virgin Islands (which are applicable to entities organized in the British Virgin Islands, including us), we are required to report certain account information to the BVI government. The government of the BVI may then exchange that information with the tax authorities of the customer’s country of residence, consistent with British Virgin Islands law, the U.S. Foreign Account Tax Compliance Act (FATCA), and the Organisation for Economic Co-operation and Development Common Reporting Standard (CRS).
You can read more about FATCA here and about CRS here.
Pursuant to BVI law, we are required to obtain self-certifications from our customers in order to︀ ascertain each customer’s tax residence. To that end, we are providing links to the following︁ four self-certification forms:
(1) FATCA self-certification form for individual customers (available here);
(2) FATCA︂ self-certification form for entity customers (available here);
(3) CRS self-certification form for individual customers︃ (available here);
(4) CRS self-certification form for entity customers (available here).
We request︄ that you complete the appropriate self-certification form and upload it to your Bitfinex account (Account︅ > Verification > Manage Documents > Upload New) by May 24, 2018, at the latest.︆ If you are a U.S. person (i.e., a U.S. resident, a U.S. citizen, or an︇ entity organized in the United States), or an entity with at least one 25%+ owner︈ who is a U.S. person, please complete the appropriate FATCA form. Otherwise, please complete the︉ appropriate CRS form.
You are required to provide us with such information. As a reminder,︊ by agreeing to our terms of service (as set out at Bitfinex ), you have︋ agreed to use the website in compliance with applicable laws or regulations.
Then again, does it mean that the crypto accounts are reportable as Financial Accounts? There are a few tests to clear for you, as an account holder to be reported.
1) open an account with a reporting financial institution
2) the account has to be a financial account
3) you have to be a tax resident of a CRS Reportable Jurisdiction
For #1 to even meet the conditions, bitfinex must be one of the 4 types of financial institution; depository, insurance, investment entity, custodial institution. I wonder which category they are in and if they specifically meet the criteria to be scoped in.
1) open an account with a reporting financial institution
2) the account has to be a financial account
3) you have to be a tax resident of a CRS Reportable Jurisdiction
For #1 to even meet the conditions, bitfinex must be one of the 4 types of financial institution; depository, insurance, investment entity, custodial institution. I wonder which category they are in and if they specifically meet the criteria to be scoped in.
All crypto exchanges that are in CRS countries and process real fiat(no the only usdt ot tusd) must report, because they hold customers money.
They could try to play around to avoid it, but they should as a law.
They could try to play around to avoid it, but they should as a law.
So the fiat is definitely reportable, but would the value of the cryptos be considered and reported too?
And since we are on that point, since USDT is a crypto, would it be considered fiat or not as it tracks the USD?
And since we are on that point, since USDT is a crypto, would it be considered fiat or not as it tracks the USD?
It's better to ask each exchange where you trade.
But for sure they don't care about customers tax results and can report crypto assets too without any issues if they decide to do this.
All what they do, its for their own favor for have less problems with regulators.
In example, how crappy bitfinex send randomly mesages about self reporting forms to some users, I believe they could really report someshitty information which could lead to problems with tax auhtoritiex in customers residence countries.
But for sure they don't care about customers tax results and can report crypto assets too without any issues if they decide to do this.
All what they do, its for their own favor for have less problems with regulators.
In example, how crappy bitfinex send randomly mesages about self reporting forms to some users, I believe they could really report someshitty information which could lead to problems with tax auhtoritiex in customers residence countries.
On your Response to #1, I read that if the cryptos are considered Financial Assets, and the entity which holds the cryptos are considered Custodial Institutions, the crypto holdings will be financial account and its net value will have to be reportable. any thoughts on this?
That's a question with no clear answer, and we can only speak of current situation. Some countries made it clear that they consider crypto financial asset (Israel, for example), some say it's a property, but we've yet to see how exactly crypto report may look. As of today, CRS/FATCA report shoould include (other than︀ personal informaiton)
Thinking of it, i'm wondering what exactly Bitfinex is going︈ to report. They don't support FIAT trading, only USDT, which is meaningless in terms of︉ CRS. Maybe they are going to report trades made via their OTC desk though.
- the gross amount of interest paid on a deposit account
- the gross amount︁ of dividends paid or credited to the account
- the gross amount of interest (including interest︂ and dividends) paid into the account
- the gross amount made from the sale of an︃ asset held in the account
- the account balance on the reporting date
Thinking of it, i'm wondering what exactly Bitfinex is going︈ to report. They don't support FIAT trading, only USDT, which is meaningless in terms of︉ CRS. Maybe they are going to report trades made via their OTC desk though.
Bitfinex support fiat trading as well as usdt.
The simpliest way for report for exchanges is a make balance reports snapshot for date 31.12 at market rate for all crypto assets.
Maybe they are simplify report and send only fiat balance that was on 31.12 on the account, but its to simple way for avoid any summ in reporting, so I doubt exchanges will do this way.
The simpliest way for report for exchanges is a make balance reports snapshot for date 31.12 at market rate for all crypto assets.
Maybe they are simplify report and send only fiat balance that was on 31.12 on the account, but its to simple way for avoid any summ in reporting, so I doubt exchanges will do this way.
Common Reporting Standard (CRS) | IB Knowledge Base
Just an example what info regular broker are send.
So, its no difference what asset you held: stock, crypto, etc.
All account balance and total summ of sales reportable.
Just an example what info regular broker are send.
So, its no difference what asset you held: stock, crypto, etc.
All account balance and total summ of sales reportable.
For good measure, I got to clarify with you that the crypto may not be reported if it is not considered a Financial Asset under the CRS definitions, refer to the OECD CRS Commentary, section VIII, para 23 oneards - Common Reporting Standard and related Commentaries - Organisation for Economic Co-operation and Development
If cryptos are not covered in the definitions or︀ do not have the same characteristics as the definition provides, then its balance may not︁ be reportable in the case of a custodial account.
If cryptos are not covered in the definitions or︀ do not have the same characteristics as the definition provides, then its balance may not︁ be reportable in the case of a custodial account.
This is a very interesting point. Any idea if there are︅ any trading platforms out there which allows you to trade (i.e. realise) your stock by︆ way to exchanging it for another stock? Probably not due to the difficulty in matching︇ a 1 to 1/whole number swap (else one party will make a transaction loss). But︈ that is such an idea to explore.
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