ConsenSys, the blockchain firm behind MetaMask, recently issued a clarification that its self-custodial wallet does not collect taxes on crypto transactions. The company addressed rumors that had been circulating on social media, stating that the rumors were based on inaccurate information. The clarification comes after several users raised concerns over MetaMask withholding customers’ crypto assets to meet tax obligations. The company clarified that the tax section in its terms of service only applies to products and paid plans that involve sales tax, and not on-chain crypto transactions.
The Misconception
The confusion arose because of one particular section, 4.3, of MetaMask’s terms of service, which reads: “We retain the right to withhold taxes as necessary.” ConsenSys explained that this section falls under the “fees and payment” section of the terms of service and is not applied to on-chain crypto transactions. The company also cited Infura, a provider of Ethereum infrastructure, as an example, explaining that Metamask’s API tool has credit card developer subscriptions that include sales tax. ConsenSys clarified that this section of the terms of service does not apply to MetaMask or any other products that do not involve sales tax.
ConsenSys’ Previous Issues
This is not the first time that ConsenSys has been embroiled in a controversy. In November of last year, the company faced backlash for collecting users’ IP addresses and Ethereum wallet addresses. The company admitted to collecting usernames, passwords, gender information, and financial data, including asset holdings, bank account numbers, and bank routing numbers. This raised concerns over privacy, and the company issued several updates and clarifications on how it stores user data. ConsenSys later revealed that the data collected via MetaMask and Infura were never sold to third parties.
The recent clarification by ConsenSys should put to rest any concerns over MetaMask collecting taxes on crypto transactions. The company has reiterated its commitment to transparency and accuracy when sharing information with users. Legal terminology can be complex, and it is crucial to understand the context of certain terms in the terms of service. ConsenSys’ clarification shows that it is essential to check the facts before spreading rumors on social media.