In recent days, FUD has once again taken over social networks, after rumours emerged that the MetaMask wallet could dip into our cryptocurrencies for tax payments. ConsenSys, the company in charge of developing the wallet, has since denied this.
Would MetaMask collect taxes on our cryptos?
Some in the community are still on edge since the launch of Ledger Recover, particularly in the mistaken belief that the company is able to recover the seed phrase stored in a hardware wallet. In this climate, it’s the MetaMask wallet that’s been in the news in recent days, because it’s allegedly able to keep the cryptocurrencies stored in it for tax payments.
This idea, which is nothing more than “fear uncertainty and doubt” (FUD), comes from a very specific paragraph in the terms of use of ConsenSys, the company in charge of developing the application:
“Each party shall be responsible, as required by applicable law, for identifying and paying all taxes and other governmental fees and charges (and penalties, interest and other additions thereto) that are imposed on such party on or in connection with transactions and payments under this Agreement. All charges payable by you are exclusive of tax unless otherwise stated. We reserve the right to withhold taxes if necessary. “
So it was from this excerpt that several people on social networks took a shortcut to conclude that ConsenSys had access to the cryptocurrencies of users of its products.
What’s really going on?
Of course, no, MetaMask is not able to do that. Despite this, ConsenSys was keen to clarify the situation, confirming that MetaMask “does NOT collect taxes on crypto transactions”, and that the said section “relates exclusively to the paid products and packages offered by ConsenSys”:
We are aware of tweets circulating with inaccurate information about ConsenSys’ terms of service.
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.
This claim is false.
– ConsenSys (@ConsenSys) May 21, 2023
This precision is explained in the section from which the extract is taken. However, as the wording of general terms and conditions of use is often designed to cover as many different scenarios as possible, ConsenSys has clearly denied the FUD:
“Legal terminology can be complex, but it is essential to stress that this section does NOT apply to MetaMask or any other product that does not involve sales tax. We believe in transparency and accuracy when sharing information with our users. “
Even if it were possible for ConsenSys to take such actions, a simple hardware wallet would get around the problem. MetaMask is only an interface and its main danger, like other similar services, is that in the case of hot wallets, the private key is stored on the user’s machine, making it vulnerable to hacking.
While ConsenSys has already been criticised in the past, notably for the fact that MetaMask recovers the IP addresses of users connected to Infura nodes, which obviously raises privacy issues, the concerns raised today are unfounded.
