Anton Bukov, the co-founder of 1inch, recently brought up issues regarding the new tax terms for the MetaMask cryptocurrency wallet.
The executive used Twitter to explain an outline section that talks about the tax responsibilities of each party. It includes identifying, paying, and having the legal right to withhold taxes if needed.
MetaMask Users Confused on Tax Obligations
ConsenSys established the Terms of Use for MetaMask. They updated the terms in April 2023 to explain how to use the MetaMask services.
The terms explain what the user’s obligations are, what laws apply, what services are offered, and that MetaMask has the right to change the terms or stop its services at any point.
Explain me new @MetaMask ToS:
4.3 Taxes. Each party will be responsible, as required under applicable law, for identifying and paying all taxes and other governmental fees and charges. (…) We reserve the right to withhold taxes where required. https://t.co/XA5Mt174Uk— Anton Bukov 🦇🔊 ⚖️ (@k06a) May 17, 2023
Specifically, Bukov was most interested in part 4.3, regarding taxes. This part stated that it is the user’s and MetaMask’s joint responsibility to identify and meet any tax and other government issued obligations.
The wallet provider also says that unless taxes are specifically mentioned, any fees paid to MetaMask do not include taxes. The user, on the other hand, is responsible for paying any taxes and service fees that might apply.
However, this part also notes, “All fees payable by you are exclusive taxes unless otherwise noted. We reserve the right to withhold taxes where required.”
Can MetaMask Withhold Taxes?
For most people, this means that MetaMask has the right to collect taxes if the law requires it. However, users were quick to question that, since it was so popular as a decentralized wallet and a site for trading without a central bank. MetaMask offers management over your digital assets through a browser extension and a mobile app. Recently they added a new feature. MetaMask’s services now work with browser compatibility for non-fungible tokens (NFTs).
Since the DEX algorithm is fully automatic and works across different jurisdictions, it is still up to the investor to pay any taxes that are due.
On the other hand, MetaMask says that the wallet provider may withhold the right taxes from the payments or transfers if the relevant authorities require it.
However, a Twitter user pointed out that the word could be applied to more than one ConsenSys product. It includes the wallet and the product package, which is made up of Infura, Quorum, Codefi, Truffle, and Diligence. It could also mean sales tax.
The company behind MetaMask, Consensys, reported a data breach last month .
It stated that the breach happened between August 2021 and February 2023 at a third-party customer service source for ConsenSys. This breach could have exposed the personal information of MetaMask users who called customer service and gave their information. For this reason, it got a lot of bad press.
