Coinbase Warns Users About Tax After Being Required To Send Some Customers' Info To HMRC

Coinbase, the American publicly traded company that operates one of the world's largest centralized crypto exchange platforms, has informed some of its customers in the U.K. to mind their tax filings after it was required to submit its customers' data to the HM Revenue & Customs (HMRC), U.K. government's non-ministerial department responsible for tax collections.

Coinbase told its customers in a formal notice that the details of those who made withdrawals of more than £5,000 in fiat during the 2021 tax year have been submitted to the HMRC.

"We're writing to let you know about a notice HM Revenue and Customs (HMRC) issued to Coinbase under Paragraph 1, Schedule 23 to the Finance Act 2011. This notice requires us to provide information on your Coinbase account to HMRC," it said, as per a screenshot of the notice that has been making rounds online.

"The notice requires the disclosure of customers with a U.K. address who received payments of more than £5,000 in fiat currency out of electronic stored value payment services provided by CB Payments LTD during the 2021 tax year," Coinbase added.

According to the crypto exchange platform, HMRC originally required the company to provide records of its U.K. customers from 2017 and 2019, but after talks with the tax authority in the region, it was agreed that the notice would only include data of customers who met certain minimum requirements.

"Based on further discussions with HMRC, a revised notice was issued with a reduced scope that now requires the disclosure of customers with a U.K. address who received more than £5,000 worth of crypto assets on the Coinbase platform during the course of the 2019/2020 tax year," it said.

It was not the first time Coinbase warned its users of financial disclosures made to the U.K. tax authority. In 2020, Coinbase sent an almost identical warning to its U.K. users for the 2019 and 2020 tax years.

"Based on further discussions with HMRC, a revised notice was issued with the reduced scope that now requires the disclosure of customers with a U.K. address who received more than £5,000 worth of crypto assets on the Coinbase platform," the exchange's email in 2020 read.

Now, the platform wants its users to work with a tax or legal advisor regarding tax and their Coinbase account's activities.

"We would encourage you to consult with your tax or legal advisor with any questions you may have regarding tax matters and your Coinbase account activity," the company noted in the recent notice.