ConsenSys, the owner of Ethereum wallet MetaMask, has denied claims that it collects taxes from cryptocurrency users. The company clarified that it only collects sales taxes on certain paid services and that tax-related terms do not apply to MetaMask and other products without sales tax.
Rumors Raised Concerns Over MetaMask and ConsenSys’s Terms of Service
Concerns were raised by members of the crypto community about MetaMask and ConsenSys’s terms of service, which indicated that certain parties were required to pay taxes as well as other government fees, penalties, interest, and charges. Some rumors suggested that MetaMask could freeze user funds for tax-related reasons, but there is no text in the terms of service that suggests this, nor is there any code that would allow the project to freeze user funds.
Cryptocurrency Investors Required to Report and Pay Taxes on Capital Gains
While MetaMask users do not need to pay sales tax, cryptocurrency investors are required to report and pay taxes on capital gains in most jurisdictions. Many major exchanges, including Coinbase and Binance.US, provide trading activity to the U.S. Internal Revenue Service (IRS) and offer tax forms that clients can use when they file their own tax returns. It is unclear whether MetaMask or ConsenSys have ever provided user information to the IRS, but they have acknowledged that users should pay taxes.
ConsenSys Reaffirms Its Position on Tax Collection
ConsenSys reaffirmed its position on tax collection through a tweet on May 21, stating that MetaMask does not collect taxes on crypto transactions and that the company has not made any changes to its terms to do so. The company clarified that it only collects sales taxes on certain paid services, such as subscriptions to the Ethereum API Infura that are paid via credit card. It said that tax-related terms do not apply to MetaMask and other products without sales tax. ConsenSys also acknowledged that it is aware of tweets circulating with inaccurate information around its terms of service and that those claims are false.
ConsenSys has clarified that MetaMask does not collect taxes on crypto transactions and that tax-related terms do not apply to MetaMask and other products without sales tax. While cryptocurrency investors are required to report and pay taxes on capital gains in most jurisdictions, it is unclear whether MetaMask or ConsenSys have ever provided user information to the IRS. However, they have acknowledged that users should pay taxes.
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