Crypto Tax Myth Busted: No, MetaMask Won’t Hold Your Funds for Taxes

Source- Investopedia

ConsenSys, the creators of the well-known MetaMask web-based cryptocurrency wallet, have responded to misleading tweets that contain inaccurate information about ConsenSys’ terms of service. They want to clarify that MetaMask does not gather taxes on cryptocurrency transactions, and they haven’t implemented any modifications to their terms to enable such actions.

According to the company’s explanation, the tax clause in their terms of service is categorized within the ‘fees and payment’ section, specifically relating to ConsenSys’ products and paid plans. It’s important to note that this section, which may contain intricate legal language, does not apply to MetaMask or any other products that do not involve sales tax.

In response to multiple Twitter posts that brought attention to section 4.2 of MetaMask’s terms of use, alleging it as a modification that enables the company to retain taxes, the company issued a clarification. This claim rapidly gained traction on Reddit’s r/CryptoCurrency forum, accumulating 450 upvotes and over 500 comments, as well as being disseminated on various crypto news websites and YouTube.

A tweet that went viral boldly proclaimed the demise of decentralization.

Numerous individuals drew comparisons between the speculated modification and the recent controversy surrounding Ledger’s introduction of the Ledger Recover feature for its hardware wallets, which some criticized as a potential “backdoor” compromising its purportedly secure design. “Why should Ledger have exclusive rights to such controversies?” questioned Kashif Raza, the founder of Bitinning, a Bitcoin education provider. “MetaMask is now joining the party!”

Crypto Community

Numerous members of the cryptocurrency community swiftly reacted and refuted the assertion. “@printer_brrr,” the curator of the Toddler Art NFT collection, chastised those who blindly tweeted about the MetaMask tax clause in the terms of service without actually reading it. They clarified that if an individual purchase a product from MetaMask, the company may withhold applicable taxes, such as sales tax, similar to how Amazon operates when you make a purchase from them.

The highest-rated comment on Reddit aimed to debunk the rumor, clarifying the context of the mentioned clause. The user, using the pseudonym Mr. Literal, explained that the reference was likely related to sales taxes rather than capital taxes. They further elaborated that when making online purchases with credit or debit cards, various countries and states may have distinct regulations regarding sales tax.

ConsenSys reaffirmed its dedication to transparency and accuracy in communicating information to its users via a tweet. They emphasized their unwavering commitment to combat misinformation regarding their products and services.