UK Tax Authority May Gain Direct Access to Customer Data from Crypto Service Providers as Information-Gathering Powers Set to Expand

Odaily reports that HM Revenue & Customs (HMRC) is pushing to expand its investigation powers over crypto asset information, proposing to allow tax authorities to directly obtain customer data from crypto asset service providers and to update rules for inspecting software and electronic records. UK crypto tax software company Recap has warned that the proposed regulations' definition of service providers is too broad and could encompass non-custodial wallet software, blockchain explorers, hardware wallet manufacturers, and tax software providers. Since Bitcoin transaction records are publicly transparent, once investors' names, addresses, and tax identities are linked to on-chain wallet addresses, their long-term asset activity records could be exposed, increasing the risk of data leaks, extortion, and physical attacks.