- Rumors spread that MetaMask, a popular crypto wallet, would start withholding taxes.
- Influencers took to Twitter to express their concerns about MetaMask.
- ConsenSys, MetaMask’s parent company, promptly denied these rumors.
Decentralization and self-custody, cherished values in crypto, are essential for crypto wallets. So much so that the crypto world was in a frenzy over the weekend over MetaMask, as users examined the tax withholding clause of its terms of service.
An alleged change in the Terms of Service sparked widespread speculation and panic on Crypto Twitter.
Does MetaMask Withold Taxes Users Owe?
WhaleChart, a widely followed crypto account, fanned the flames on Sunday, May 21. “Pay your taxes, or Metamask will pay them for you,” the account wrote. Crypto influencers like Shannen Michaela shared similar posts soon after.
Other crypto influencers echoed this sentiment, creating unease throughout the community. Many, including Budhil Vyas, questioned Metamask’s commitment to decentralization.
These criticisms prompted an urgent response from ConsenSys, MetaMask’s parent company. The company took to social media to clarify the situation and debunk the rumors. Specifically, they explained that MetaMask does not collect taxes on crypto transactions.
"We are aware of tweets circulating with inaccurate information about ConsenSys' terms of service,” the firm tweeted. “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."
In reality, the clause refers to taxes on their products and services, which are subject to sales taxes. Like any other business, ConsenSys has to withhold taxes on the sales of its products, as pointed out by Glassnode accounting. The withholding clause actually refers to these services and not taxes that MetaMask users may owe.
Judging by the replies to the tweet by ConsenSys, their explanation was enough to calm most users. However, the situation shows how easily panic and misinformation spreads in crypto.
On the Flipside
- In April 2023, MetaMask denied allegations of a supposed wallet exploit, which drained $10 million from user funds.
Why This Matters
Misinformation can spread like wildfire in the fast-paced world of crypto. It’s essential to verify facts from trusted sources before reacting.
Read more about allegations about MetaMask and parent firm ConsenSys:
MetaMask Owner ConsenSys Say They Collect Wallet Data, Users Outraged
Read a comprehensive review of crypto exchange Kraken:
Kraken Exchange: Navigating the Crypto Seas with Ease