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MetaMask debunks rumours of withholding customers' crypto for taxes

ConsenSys, the parent company behind MetaMask, has dismissed false claims of the organisation collecting tax from users on crypto transactions

Shashank Bhardwaj
Published: May 23, 2023 04:31:45 AM IST

MetaMask debunks rumours of withholding customers' crypto for taxesImage: Shutterstock

Denying rumours that MetaMask is collecting taxes from cryptocurrency users, ConsenSys, the company behind the crypto wallet took to Twitter on May 22, 2023 to clarify its stance.

The company called the claim false as it was backed by “inaccurate information” which was drawn from a misreading of MetaMask’s terms of service. It clarified that the section on tax of its terms of service was only directed towards specific products and paid plans, and did not have any reference to on-chain crypto transactions.

“Legal terminology can be complex, but it’s crucial to emphasise that this section does not apply to MetaMask or any other products that don’t involve sales tax…. MetaMask does not collect taxes on crypto transactions and we have not made any changes to our terms to do so.”

On May 21, 2023, some crypto community members condemned the company after noticing a section in MetaMask’s terms of service which stated that the company “reserved the right to withhold taxes where required,” This was interpreted by some as being related to a users’ income taxes.

This misinformation surpassed other news, gathering more than 500 upvotes and 600 comments when it was published on the front page of r/cryptocurrency on Reddit.

A large number of Twitter accounts too went ahead with posting screenshots of the highlighted section. Some even claimed MetaMask to be treading the same path as Ledger, which initiated a wave of controversy among surprised users.

Nonetheless, there were many who didn't buy the rumours with some members of the crypto community pushing away the claims, “Everyone blindly tweeting about the MetaMask tax clause in TOS but not actually reading it,” wrote pseudonymous Twitter user printer_brrr.

“If you buy a product from them, they can withhold taxes like sales tax for that product. Just like Amazon does when you buy from them,” they added.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash