Bitfinex began sending out requests to its customers asking them to provide information about their tax residency. Then these data can be transferred to the tax services of their countries.

Bitfinex, one of largest cryptocurrency exchanges in the world, tightens compliance requirements for its clients regarding taxation of their revenues derived from the cryptocurrency trading. Customers of the crypto-exchange started receiving letters from Bitfinex, requesting to provide information their tax residency. The information must be submitted before 24 May, WhalePanda twitter account reported.

"Under the laws of the British Virgin Islands, we are required to report certain 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 the British Virgin Islands, the U.S. Foreign Account Tax Compliance Act (FATCA), and the Organization for Economic Co-operation and Development Common Reporting Standard (CRS)," the letter reads.


The letter also notes that US tax residents or companies in which US residents own 25% + 1 share, are requested to report their cryptocurrency assets directly to the US tax service in accordance with FATCA requirements.

Since 2018, US tightened cryptocurrency taxation. The new amendments, which entered into force on 1 January 2018, apply now to all exchange-like operations. Crypto investor must declare every exchange operation involving cryptocurrency, even if the exchange is made between different cryptocurrencies (for example, bitcoin to Ethereum). In the United States, the cryptocurrency is taxed as ordinary income if it is owned for a while or as a return on capital if it is owned for a long time.