The UK tax authority is seeking broader powers to investigate crypto-related information, with proposed rules that would let officials obtain customer data directly from crypto asset service providers and revise how software and electronic records are inspected. The plan has drawn criticism from Recap, a UK crypto tax software company, which said the draft framework defines service providers too broadly. In its view, the scope could extend beyond custodial firms to include non-custodial wallet software, blockchain explorers, hardware wallet manufacturers and tax software providers. Recap also warned about the privacy and personal safety implications tied to public blockchain records. Because Bitcoin transaction histories are openly visible, linking an investor’s name, address and tax identity to an on-chain wallet address could expose a long-term record of that person’s asset activity. The company said such exposure may raise the risk of data leaks, extortion and physical attacks.
UK tax authority HM Revenue and Customs is pushing to expand its powers to investigate crypto asset information, with proposed changes that would allow it to obtain customer data directly from crypto asset service providers and update rules covering inspections of software and electronic records.
Recap, a UK crypto tax software company, warned that the proposed rules define crypto asset service providers too broadly. According to the company, the scope could include non-custodial wallet software, blockchain explorers, hardware wallet manufacturers and tax software providers.
Recap also said the public nature of Bitcoin transaction records creates added privacy risk. If an investor’s name, address and tax identity are linked to an on-chain wallet address, that connection could expose a long-term record of the person’s asset activity. The company said that could increase the risk of data leaks, extortion and physical attacks.
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