Cryptocurrency exchanges pushed by British taxman to aid in tax evasion crackdown

The tax authority in Britain, HM Revenue & Customs (HMRC) is reportedly putting pressure on cryptocurrency exchanges to reveal the names and transaction records of their customers. The move has been launched to crack down on tax evasion within the industry.

Sources familiar with the matter said that letters have been sent to the exchange companies. Some of the details sort after includes customer lists and their transaction data. At the moment three crypto exchanges have received the letter including Coinbase, eToro, and CEX.IO.

“HMRC is looking to work with exchanges when it comes to finding information on people who have been buying and selling crypto. I think they will only go back a couple of years, two or three years” one of the sources shared with CoinDesk.

According to the source, it will not be easy to provide the taxman with ten years’ worth of data. The source continued:

“If they [HMRC] do only go back two or three years, I think the interesting thing here is, that the individuals who went into crypto very early on in 2012-13 will not be affected. The ones who probably made the largest gains won’t be affected, it will be the people who came in around the time crypto peaked.”

CoinDesk reached out to HMRC to seek more information on the matter but the taxman decline to provide details within the letters. However, the tax authority confirmed that letters had been sent in a bid to collect the tax.

“These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.”

A similar endeavor is being conducted by the US tax man as well. Letters have also been sent to cryptocurrency holders to properly file their returns.