The European Union indicated on Thursday that it will make cryptocurrency companies report the holdings of their European users to tax authorities. The proposed eighth directive on administrative cooperation was previously reported by CoinDesk and may have far-reaching implications, including forcing non-EU companies to register with EU tax authorities.
In a statement, EU tax commissioner Paolo Gentiloni, said "Anonymity means that many cryptocurrency users who make significant profits fall under the radar of national tax authorities. This is not acceptable."
The application of the measures was not fully clarified, as the cryptocurrency industry has several entities and actors residing in several jurisdictions, including some that claim to have no base of operations. In addition, there should be concern for the user data honeypot that logging user properties creates.
Often, holdings on centralized exchanges areThey are not combined with sensitive identifying information that can be used by criminals to attach people to their entries.
There were several cases of leaks of data documented in and out of cryptocurrency industry : and those are just the ones that come up. Forcing companies to provide European tax authorities – including companies based outside the EU – once again forces companies to collect massive amounts of data exposing their users and then pass it on to the European tax authorities they must trust. to keep them safe.
Concerns were also expressed that this could have ramifications for the EU's Cryptocurrency Markets Regulation (MiCA), which is the "first comprehensive effort to deal with cryptoassets and provides rules contained in Mifid, Market Abuse and the Prospectus Regulation for the crypto industry”, according to the International Financial Law Review (IFLR).
The European Crypto Initiative made a statement indicating which was “concerned that it applies to a much broader range of obligated entities and individuals” than MiCA.
The EU said it believed the measure could generate up to $2,5 billion (2,4 billion euros) from the introduction of the directive.
