ConsenSys Debunks MetaMask Withholding Customer’s Crypto for Tax Rumors

ConsenSys — the blockchain firm behind MetaMask — clarified that its self-custodial wallet does not collect taxes on crypto transactions, nor has it modified its terms of service to do so.

In an update, the company said the rumor is false and was based on “misinformation,” while acknowledging that “the legal terminology can be complex.”

ConsenSys clarifies

The clarification comes a day after several users raised concerns about Metamask withholding customers’ crypto assets in order to meet tax obligations. Several of them highlighted a particular clause, 4.3, of MetaMask’s Terms of Service, which reads: “We reserve the right to withhold taxes as necessary.”

Clearing up the confusion ConsenSys Said The tax section in its terms of service falls under the “fees and payments” section, and applies exclusively to products and payment plans offered by the company and has nothing to do with on-chain crypto transactions .

Citing Infra as an example, ConsenSys said MetaMask’s application programming interface (API) tool has a credit card developer subscription that includes sales tax.

“The legal terminology can be complicated, but it is important to emphasize that this section does not apply to MetaMask or any other product that does not include sales tax. We believe in transparency and accuracy when it comes to sharing information with our users.

widely circulated fake news Twitter even reached the front page of r/cryptocurrency on Reddit, which translated a number of other outlandish claims. Comparisons were also made to Ledger’s new update – Ledger Recover – which has so far faced tremendous resistance from the community.

privacy hazards

This isn’t the first crash ConsenSys has found itself in. While Ethereum Studio did manage to quash rumors about it racking up taxes from crypto users, it received significant backlash late last year for collecting their IP addresses and Ethereum wallet addresses. ,

ConsenSys admitted to collecting usernames, passwords, gender information, and financial data, including asset holdings, bank account numbers, and bank routing numbers, thus raising privacy concerns in November.

After intense protests, the company issued several updates and clarifications on how it stores user data. To repair the damage, it further revealed That the data collected through MetaMask and Infura is never sold to third parties.