HM Revenue and Customs: Proposed Expansion of Access to Information on Crypto Assets

The UK HM Revenue and Customs is pushing to expand the investigative powers regarding cryptocurrency asset information, proposing to allow tax authorities to directly obtain customer data from cryptocurrency service providers and update software and electronic record inspection rules.

UK cryptocurrency tax software company Recap warned that the proposed regulations have an overly broad definition of service providers, which may include non-custodial wallet software, blockchain explorers, hardware wallet manufacturers, and tax software providers. Due to the public and transparent nature of Bitcoin transaction records, once investors' names, addresses, and tax identities are associated with on-chain wallet addresses, it may expose their long-term asset activity records, increasing the risks of data breaches, extortion, and personal attacks.