Site icon Crypto Academy

ConsenSys Debunks MetaMask Withholding Customer’s Crypto for Tax Rumors

ConsenSys Debunks MetaMask Withholding Customer’s Crypto for Tax Rumors

In a recent update, ConsenSys, the blockchain firm behind MetaMask, has clarified that its popular self-custodial wallet does not collect taxes on cryptocurrency transactions nor has it made any modifications to its terms of service to enable such actions. The clarification comes in response to rumors that circulated on social media platforms, causing concerns among MetaMask users.

The confusion stemmed from a specific section, 4.3, of MetaMask’s terms of service, which stated, “We retain the right to withhold taxes as necessary.” However, ConsenSys promptly addressed the issue, explaining that this section falls under the “fees and payment” category of the terms and solely applies to the company’s products and paid plans. It has no connection to on-chain crypto transactions, which MetaMask facilitates.

The Misconstrued Section and User Concerns

To clarify further, ConsenSys provided an example using Infura, another product it offers. The company highlighted that MetaMask’s Application Programming Interface (API) tool includes credit card developer subscriptions that may involve sales tax. However, ConsenSys emphasized that this specific tax section does not apply to MetaMask or any other products that are not subject to sales tax. The company stressed its commitment to transparency and accuracy in sharing information with its users.

Unfortunately, the misinformation surrounding MetaMask withholding customer’s crypto for tax purposes spread quickly on social media platforms, even reaching the front page of r/cryptocurrency on Reddit. This led to additional unfounded claims and comparisons with Ledger’s controversial update, Ledger Recover, which faced substantial resistance from the community.

ConsenSys’ Past Privacy Issues

ConsenSys has had its share of mishaps in the past, further adding to the skepticism surrounding the rumors. In late 2022, the Ethereum studio faced backlash for collecting users’ IP addresses and Ethereum wallet addresses, raising significant privacy concerns. The company admitted to gathering sensitive data, including usernames, passwords, gender information, and financial details such as asset holdings, bank account numbers, and bank routing numbers.

However, ConsenSys responded to the pushback and took steps to address the privacy concerns by issuing updates and clarifications regarding its data storage practices. The company made it clear that the data collected through MetaMask and Infura was never sold to third parties, aiming to restore trust among its user base.

It is important to note that ConsenSys’ swift response to the tax-related rumors surrounding MetaMask demonstrates its commitment to addressing user concerns promptly and providing accurate information. As the blockchain industry continues to evolve, clear communication and transparency are crucial to maintaining trust between companies and their users.

Exit mobile version