Crypto exchanges would have to share details about the identity and transactions of their users with foreign tax authorities under plans submitted for stakeholder comment Tuesday by the Organization for Economic Cooperation and Development (OECD), which is seeking to avoid foreign digital assets being used to hide wealth.
- There’s a «significant risk» that overseas stashes of digital assets could undermine existing requirements to share details of foreign bank accounts, intended to stop tax evasion and illicit finance, the OECD said in a consultation open until the end of April.
- The proposals say crypto providers would have to share their users’ names, addresses, Social Security numbers and details of transactions both between crypto and fiat, and between different kinds of digital assets. Exchanges would also have to check the tax residence of new users, and would be given 12 months to figure it out for existing clients.
- The rules would also apply to both offline «cold» wallets and hot ones, as well as services like crypto ATMs. But the OECD said it wants to exclude people simply validating blockchain transactions, as well as «closed loop» assets like vouchers used in a particular store. Potential new central bank digital currencies and other kinds of electronic money would be included under existing> The OECD says it will finalize the rules based on peoples’ comments and will update the G20 in October this year.
- The move comes as tax authorities across the world attempt to clarify the liability of crypto holdings, and international standard-setter Financial Action Task Force (FATF) seeks to stop anonymous accounts being used to launder money or fund terrorism.
Read more: OECD Preparing Crypto Tax Reporting Framework for World’s Largest Economies