ConsenSys Denies MetaMask Withholding Crypto for Taxation
ConsenSys stated that the taxes only apply to certain paid plans and products.
ConsenSys, the blockchain company behind MetaMask, made it clear that its self-custodial wallet does not collect taxes on cryptocurrency transfers and that the terms of service have not been changed to do so.
In an update, the company said the rumour was false and based on “inaccurate information,” but they did say that “legal terminology can be complicated.”
ConsenSys Clarifies
The clarification comes a day after a few users said they were worried that MetaMask was hanging on to customers’ crypto assets to pay taxes. A lot of them pointed to section 4.3 of MetaMask’s terms of service, which says:
“We retain the right to withhold taxes as necessary.”
In response to the confusion, ConsenSys said that the tax part of its terms of service is in the “fees and payment” section and only applies to the company’s paid products and plans. It has nothing to do with crypto transactions that happen on-chain.
ConsenSys said that Metamask’s Application Programming Interface (API) tool has licences for credit card developers that include sales tax. They used Infura as an example.
“Legal terminology can be complex, but it’s crucial to emphasize that this section DOES NOT apply to MetaMask or any other products that don’t involve sales tax. We believe in transparency and accuracy when it comes to sharing information with our users.”
Misinformation that was widely shared on Twitter made it to the front page of r/cryptocurrency on Reddit, where it was turned into several other crazy claims. People also drew parallels to Ledger’s new update, Ledger Recover, which has been met with a lot of pushback from the community so far.
Privacy Mishaps
ConsenSys has been in trouble before, so this isn’t the first time. Even though the Ethereum studio was able to dispel rumours that crypto users would be taxed, it got a lot of flak for collecting their IP addresses and Ethereum wallet names at the end of last year.
ConsenSys admitted in November that it had been gathering usernames, passwords, information about gender, and financial data like asset holdings, bank account numbers, and bank routing numbers. This raised privacy concerns.
After getting a lot of negative feedback, the company changed and made clear how it saves user data. In an effort to make up for the damage, it was also revealed that the information gathered through MetaMask and Infura was never sold to outside parties.
