Yesterday, ConsenSys, the company responsible for one of the most popular cryptocurrency wallets MetaMask, responded to the sudden panic that filled its customers' Twitter community, clarifying that recent posts about ConsenSys’ terms of service on the social network are "inaccurate."
"Let's clarify one thing upfront: MetaMask does NOT collect taxes on crypto transactions and we have not made any changes to our terms to do so," the company’s tweet reads.
The misunderstanding started on May 21, when Reddit user ChemicalGreek informed cryptocurrency users about what that person believed was a new change to MetaMask’s terms of service.
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"After all the Ledger drama, we may see another one. MetaMask adjusted their terms of service and now they say that they have the right to withhold taxes where required," ChemicalGreek posted, expressing concerns about the possibility of the government control over cryptocurrency, "This is not what decentralization looks like. I fear that more and more companies will try to control people and their funds where they can. Governments probably seek some kind of centralization where they can intervene when possible."
The Reddit user was referring to the text under paragraph 4 on fees and payments, where MetaMask’s terms of service include rules about taxes.
"Each party will be responsible, as required under applicable law, for identifying and paying all taxes and other governmental fees and charges (and any penalties, interest, and other additions thereto) that are imposed on that party upon or with respect to the transactions and payments under this Agreement. All fees payable by you are exclusive taxes unless otherwise noted," the document states, adding, "We reserve the right to withhold taxes where required."
The last sentence about withholding taxes was the catalyst for the rumors, which were still circulating on Twitter at press time despite the explanation provided by ConsenSys.
Interestingly, even though Twitter users claim this sentence was only recently added to MetaMask’s terms of use, it should have been there already in April, when the most recent update took place, according to the official information on MetaMask’s website.
At the same time, some MetaMask customers were skeptical about this rumor from the very beginning. For example, Twitter user Moneyprintergobrrr.eth said in a post, "Everyone blindly tweeting about the MetaMask tax clause in TOS but not actually reading it," explaining that the section in question refers to the products and paid plans offered by MetaMask. "If you buy a product from them, they can withhold taxes like sales tax for that product. Just like Amazon does when you buy from them," Moneyprintergobrrr.eth added.
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Later, Moneyprintergobrrr.eth explained to users who were still concerned that MetaMask may withhold money without permission to offset the company’s fees, "They can’t do anything with the funds in your wallet, that is not at all what the taxes terms are about, it’s the same as if you use a credit card on Amazon and they withhold sales tax for your state."
"Legal terminology can be complex, but it is crucial to emphasize that this section DOES NOT apply to MetaMask or any other products that don't involve sales tax. We believe in transparency and accuracy when it comes to sharing information with our users," ConsenSys stated in its tweet, encouraging its users to visit the wallet’s website and contact the company if there are any concerns.
