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ConsenSys – the blockchain company behind MetaMask – has clarified that its self-custodial wallet does not impose taxes on cryptocurrency transactions, nor has it altered the terms of service to do so.
In an update, the firm stated that the rumor is unfounded and was based on “inaccurate information,” while acknowledging that “legal terminology can be complex.”
ConsenSys Clarifies
This clarification follows a day after numerous users expressed worries about MetaMask potentially withholding customers’ crypto assets to fulfill tax responsibilities. Many pointed to a specific section, 4.3, of MetaMask’s terms of service, which states: “We retain the right to withhold taxes as necessary.”
To address the misunderstanding, ConsenSys explained that the tax section in its terms of service is part of the “fees and payment” section, and it solely pertains to products and paid plans provided by the company, having no relation to on-chain cryptocurrency transactions.
Using Infura as an example, ConsenSys noted that MetaMask’s Application Programming Interface (API) tool offers credit card developer subscriptions that include sales tax.
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“Legal terminology can be complex, but it’s important to stress that this section DOES NOT apply to MetaMask or any other products that do not involve sales tax. We prioritize transparency and accuracy in communicating with our users.”
The widely spread misinformation on Twitter even made its way to the front page of r/cryptocurrency on Reddit, leading to several other exaggerated claims. Comparisons were also made to Ledger’s recent update – Ledger Recover – which has, thus far, faced considerable opposition from the community.
Privacy Mishaps
This is not the first incident that ConsenSys has encountered. While the Ethereum studio successfully refuted claims about collecting taxes from crypto users, it faced significant criticism for gathering their IP addresses and Ethereum wallet addresses towards the end of the previous year.
ConsenSys acknowledged collecting usernames, passwords, gender information, and financial details, including asset holdings, bank account numbers, and bank routing numbers, which raised privacy concerns in November.
In response to the substantial backlash, the company provided several updates and clarifications regarding its user data storage practices. To mitigate the fallout, it also disclosed that the data collected through MetaMask and Infura was never sold to third parties.
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