OECD’s CARF implementation in UK
Following the UK’s Spring Budget 2024, outlined on Wednesday, the government published a consultation seeking views on the implementation of the OECD’s Crypto-Asset Reporting Framework (CARF), the new international tax transparency regime for the automatic exchange of information on crypto-assets.
The consultation seeks views on a potential extension of the CARF to include reporting on UK resident taxpayers by UK service providers. It will run for 12 weeks from 6 March 2024 to 29 May 2024.
Commentary and amendments have been agreed “at the international level to ensure consistency across jurisdictions”.
“The growth of the cryptoasset market has created significant challenges to tax transparency frameworks like the Common Reporting Standard that are integral to tackling tax evasion, tax avoidance and non-compliance,” the Government says.
“The G20 gave the OECD a mandate to develop the CARF, a dedicated global tax transparency framework, which provides for the automatic exchange of tax information on transactions in cryptoassets in a standardized manner.”
UK Government
“Cryptoassets can be transferred and held without interacting with traditional financial intermediaries and without any central administrator having full visibility. In addition, cryptoassets as an asset class do not generally fall within the scope of existing Automatic Exchange of Information frameworks,”
“In response, the G20 gave the OECD a mandate to develop the CARF, a dedicated global tax transparency framework, which provides for the automatic exchange of tax information on transactions in cryptoassets in a standardized manner with the jurisdictions of residence of taxpayers on an annual basis.”
From the end of April, new regulations will apply in the UK to the seizure of cryptoassets suspected of use in criminal activity.
The National Crime Agency (NCA) will be given powers to seize assets both from exchanges and custodian wallet providers. And authorities will be empowered to dispose of seized assets, typically by transferring them to a designated ‘burn wallet.’
The regulations are part of an amendment to the Economic Crime and Corporate Transparency Act 2023.
Spain bans Worldcoin
The Spanish Data Protection Agency (AEPD) has ordered a precautionary measure against Tools for Humanity Corporation, which does business as Worldcoin, to halt the collection and processing of personal data being carried out in Spain and to block the data already collected.
The AEPD has received several complaints against this company about insufficient information, the collection of data from minors and the fact that consent cannot be withdrawn, among other infringements.
“It is unfortunate that the Spanish data protection authority (AEPD) is circumventing established procedures under GDPR with their actions today, which are limited to Spain and not the broader EU.”
Jannick Preiwisch, Data Protection Officer, Worldcoin Foundation
The agency says the decision is based on exceptional circumstances, where it is necessary to adopt precautionary measures aimed at the immediate cessation of the processing activities to prevent the possible transfer of data to third parties and to safeguard the fundamental right to the protection of personal data, and that it applies for a maximum of three months.
“It is unfortunate that the Spanish data protection authority (AEPD) is circumventing established procedures under GDPR with their actions today, which are limited to Spain and not the broader EU,” Jannick Preiwisch, Data Protection Officer, Worldcoin Foundation, said in a statement.
“It is also unfortunate that they are spreading inaccurate and misleading claims about our technology globally after our efforts to provide them with an accurate view of Worldcoin and World ID have gone unanswered for months.”
Last year, concerns were raised by regulators in Europe about Worldcoin’s harvesting of biometric data.
The French Commission Nationale Informatique & Libertés called the legality of biometric data collection “questionable”, while the UK’s Information Commissioner’s Office said they should be consulted regarding any high risk data processing.
ShapeShift settles charges
Crypto company ShapeShift has agreed to pay the SEC $275,000 following the charge it acted as an unregistered dealer in connection with its operation of an online crypto asset trading platform.
According to the SEC’s order, ShapeShift operated ShapeShift.io, an online platform through which it bought and sold crypto assets from and to users from 2014 until early 2021. At its peak, the ShapeShift platform allowed customers to exchange at least 79 crypto assets. ShapeShift acted as a market-maker for these assets by serving as the counterparty to every transaction, marketing itself as a crypto “vending machine.”
The crypto assets bought and sold by ShapeShift included crypto assets that were offered and sold as securities as defined in Section 3(a)(10) of the Securities Exchange Act of 1934.
SEC Commissioners Hester Peirce and Mark Uyeda said the action was “the latest installment in the serial drama of the Commission’s poorly conceived crypto policy”.
“This enforcement action underscores the adverse consequences of the Commission’s approach to regulation in the crypto space and adds to the ambiguity that hangs over the crypto world,” the commissioners said in their dissent.
“It is entirely unclear how ShapeShift was to discern that the Commission would consider crypto assets generally – and any crypto asset in particular – a security in the form of an investment contract. Even now, 10 years on, it is hardly more discernable. But perhaps that ambiguity is exactly the result the Commission wants.”