The popular self-custodial cryptocurrency wallet MetaMask’s developer, ConsenSys, has refuted claims that it withholds user taxes.
The business confirmed in a tweet on Saturday that the rumours were founded on “inaccurate information” derived from a misinterpretation of MetaMask’s terms of service.
The business stated that the assertion is “false” and added, “Let’s clarify one thing upfront: MetaMask does NOT collect taxes on crypto transactions, and we have not issued any changes to our rules to do so.
The miscommunication reportedly resulted from a screenshot of the MetaMask terms and conditions, which said that the company has “the right to withhold taxes where required.”
The blockchain business claimed that the part only applied to goods and paid ConsenSys plans, such as Infura’s subscriptions for credit card developers that contain sales tax.
Legal jargon can be confusing, but it’s important to stress that MetaMask and other products that don’t require sales tax are excluded from this part, according to the business.
MetaMask does not collect taxes on cryptocurrency transactions, and we have not amended our agreements to do so.
After being uploaded on the r/CryptoCurrency subreddit, where it has amassed over 500 upvotes and 600 comments, the false information spread like wildfire.
Many crypto influencers also picked up the report, which helped the erroneous information proliferate.
The business previously disclosed that it would begin gathering specific user-provided data, including identity data (name, username, gender, date of birth, etc.), profile data (including login and password), contact, financial, and transaction data, among other things.
ConsenSys stated that its other product, Infura, would record users’ IP addresses each time they sent a transaction.
Members of the crypto community who were concerned about their on-chain privacy criticized the change.
ConsenSys made a subsequent announcement acknowledging that the update had sparked discussions, both externally and within the organization, about enhancing the prioritization of privacy for MetaMask and Infura users.
The business also changed how it retained data, keeping user information, including wallet addresses and IP addresses, for only seven days instead of the previous 30.
Crypto Traders Are Expected to Pay More Taxes
Users of MetaMask won’t be charged taxes, but it’s anticipated that cryptocurrency traders will start paying more taxes.
According to reports, US Vice President Joe Biden has stated he is not eager to sign a debt ceiling agreement that would benefit cryptocurrency traders.
“I’m not going to ink on to a deal that shields wealth tax evaders and cryptocurrency traders while putting the safety of nearly 1 million Americans receiving food assistance.”
The so-called protections for cryptocurrency traders are about tax-loss harvesting, a kind of tax planning that entails selling digital currencies that have lost value to reduce capital gains taxes on other investments.