UK’s Tax watchdog will be able to seize crypto wallets: Report
The new proposal aimed to provide regulatory approval for the UK’s Tax Authority to directly seize crypto assets from tax-dodging businesses.
The UK is a very big friendly region for crypto companies. In the last 6 months, crypto businesses faced some regulatory heat, but still, crypto trading is fully legal for the UK’s residents. The Financial Conduct Authority (FCA) is the dominant crypto regulatory body in the jurisdiction of the UK.
Latest local media reports confirmed that the UK government is continuously working on a proposal to bring regulatory authority into the hand of HM Revenue & Customs (HMRC) to take direct action against businesses/individuals/entities to seize their cryptocurrencies from their crypto wallets, in case they have not fulfilled their tax obligations.
The consultation paper on this proposal noted that increasing numbers of crypto wallet users hints that people are probably using crypto assets in payment services, which is a violation of the UK’s law.
Secondly, the HMRC body has full authority to recover funds from the bank account of businesses that have failed to pay taxes, so the proposal aimed to bring similar power for HMRC to take action against crypto wallets, which are more similar to bank accounts.
So far it is not clear whether this proposal will provide authority to the HMRC to seize crypto assets from centralized only or will further extend to decentralized crypto wallets, or say non-custodial crypto wallets. In short, here it will be a very big challenge for the lawmakers to bring this rule over the crypto sector.
UK banks vs crypto
From Q4 2022 to Q1 2023, the majority of the US-based banks distanced from providing banking services to the crypto companies citing hidden regulatory pressure.
A similar kind of wave among the UK-based Banks also seen. In late March & early April of this year, many media reports confirmed that UK-based banks distanced themselves from crypto companies citing the downfall of the banks because of their exposure to the crypto business.
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