Bloomberg News reports that information must be produced to the US Internal Revenue Service by M.Y Safra Bank related to customers that may not have paid their taxes on digital currency transactions through SFOX Inc., the prime dealer, as the ruling was given by US Judge on Thursday.
Information was requested by the IRS for determining whether the taxpayers report crypto losses and profits about their tax returns. This was revealed as per a statement by the US attorney Damian Williams, who is responsible for overseeing the Southern District of New York.
The summons was granted by US District Judge Paul Gardephe in New York which the IRS uses in tax investigations across the world. The US served the same information demands as well, which are known as “John Doe” summons, requesting user data from Coinbase, Circle Internet, and Kraken.
The Internal Revenue Service has pushed for collecting the taxes on the digital tokens as a part of the broader measure by the lawmakers and regulators in the US, which also include the SEC or the Securities and Exchange Commission and the Commodity Futures Trading Commission, for extending the oversight to the crypto trading.
Bloomberg News reports that the tax agency previously had asked the federal judges in Los Angeles and New York to allow it to serve a summons on SFOX as well as M.Y Safra Bank, which was a partner with SFOX in 2019 for offering its clients cash deposit accounts that are backed by the Federal Deposit Insurance Corporation. The IRS is also asking for records related to accounts and transactions for cryptocurrency users with transactions that have exceeded $20,000 in the year between 2016 and 2021.
As per a May analysis by Barclays Plc, investors of cryptocurrency pay less than half of the taxes that they owe. SFOX boasts of more than 175,000 users that have already made $12 billion in transactions since 2015, as per government records.
