- MetaMask revamps terms of use: MetaMask, a popular Ethereum native non-custodial wallet, has updated its terms of use and now has the right to “withhold taxes where required”.
- Crypto tax regime in the US: This change could directly apply to sales tax and not capital gains tax. Depending on the user’s jurisdiction and applicable laws, MetaMask will now reserve the right to withhold sales taxes when required.
- Capital gains taxes in the US: Crypto holders using MetaMask and complying with United States laws must file their capital gains tax separately. In the United States, cryptocurrencies are treated as property for tax purposes.
MetaMask Revamps Terms of Use
MetaMask, a popular Ethereum native non-custodial wallet, has updated its terms of use and now has the right to “withhold taxes where required”. This change in their service is why the cryptocurrency community on Reddit is beginning to question ConsenSys’ decision to change their terms of use. It is not immediately clear what could have motivated ConsenSys to update its terms. However, companies regularly updated their terms and conditions to adapt to changing regulatory environments.
Crypto Tax Regime in The United States
Specifically on tax obligations, ConsenSys, the team behind MetaMask, acknowledges that taxes must be paid as stated by applicable laws. However, in the new terms of use, MetaMask “reserves the right to withhold taxes where required”. Over the years, MetaMask has evolved from being a wallet where users can receive and spend ethereum (ETH) and related tokens minted in Ethereum and other smart contracting platforms like Polygon or Fantom. It has gradually integrated several features including direct crypto purchases using fiat currencies via providers like PayPal or direct bank transfer.
Capital Gains Taxes in The United States
Considering MetaMask’s evolution, this could directly apply to sales tax and not capital gains tax. When token holders buy sell or trade crypto assets they will likely have to pay capital gains taxes if they reside within US jurisdictions; this amount will depend on how long they held onto said crypto asset(s).
Tax Obligations for Crypto Holders Using Metamask
Therefore every crypto purchase via MetaMaster would translate into an automatic withholding of any applicable sales taxes – separate from any potential capital gains taxation – which must also be filed separately by all holding US residency status under applicable law(s).
