EDITOR'S NOTE: Crypto is a hedge against inflation, many believed. That thesis proved otherwise. Crypto is uncorrelated to the broader equities markets, some thought. That, too, didn’t pan out. Crypto is a reliable store of value, some investors still believe. Not only does extreme volatility make value unstable, but how can it store value when the source of its own value is questionably obscure? Crypto provides a means to hold “private and decentralized money” that’s beyond the access and control of the government. The latest move by the Argentinian government shows that this is far from true. Around 1,200 crypto wallets were recently seized by the Argentinian government for non-payment or delinquency of taxes. You can read the full story below. But before you do, just pause for a minute. What role was crypto supposed to play in this new digital money economy? What was it supposed to offer that traditional non-fiat assets like precious metals couldn’t? How was its decentralized nature supposed to serve as a safeguard for capital in contrast to the fiat system? More importantly, what did crypto succeed at besides demonstrating the consequences of financial hysteria?
When it comes to cryptocurrency, the South American country Argentina from crypto adoption to regulations, has a long list of hot topics. As well as, according to a recent news report by local media, the tax office in Argentina has confiscated more than 1,200 cryptocurrency wallets that were connected to delinquent taxpayers.
The laws and rules governing cryptocurrencies are being implemented all around the world as their use grows. Although keeping up with the regulations in many international jurisdictions is difficult since the crypto environment is not constant, it always is in changing mode.
Digital wallets belonging to taxpayers in Argentina are being seized by the tax agency more frequently. A total of 1,269 crypto-based wallets belonging to individuals who owe money to Argentina’s AFIP (which upholds the country’s tax and customs rules) have been ordered to be seized by courts.
Argentina Tax Authority’s Initial Step To Recover Debt
The many ways taxpayers might conceal their money to avoid taxation are coming to the notice of tax authorities worldwide. Therefore, the present policy and procedure of AFIP is an initial step in recovering debts. It has been actively gaining control of the institution’s debtors’ digital wallets.
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The firm also suggests that they will try to confiscate additional assets owned by the taxpayer if they are unable to pay their debt:
When the available balance is insufficient, or the taxpayers do not have this type of placement, they proceed to request embargoes on other assets.
In fact, The AFIP has also determined that there are 9,800 past-due taxpayers. Thus, the AFIP will request the Justice Department to impose embargoes on these virtual wallets.
Moreover, with this move, the organization will be able to seize money from more than 30 different crypto wallets, including Ualá, Naranja X, Bimo, and others. The digital wallet offered by Mercadolibre, Mercado Pago, which enables creditors to store their funds away from tax officials, is the tax authority’s top priority.
Sebastián Dominguez, SDC Tax advisors clarifies that while the novelty indicates that digital wallets are being targeted in the procedure owing to their expansion, it does not follow that the other assets are not potentially vulnerable to embargos.
Nevertheless, there are some favorable local conditions behind crypto adoption, including the increase in the inflation rate, the devaluation of the local currency, and the lack of access to US dollars. Therefore, Argentines chose cryptocurrencies as the most excellent approach to protect their investments.
Originally published on Bitcoinist.