IRS Seeks SFOX Customer Information in Cryptocurrency Tax Push

The Internal Revenue Service is seeking to identify customers of cryptocurrency prime dealer SFOX as part of its efforts to force crypto investors to pay taxes on their holdings. Bloombeg reports: In court filings in New York and Los Angeles, the tax authority asked federal judges to let it serve summonses on SFOX and M.Y. Safra Bank, which partnered with SFOX in 2019 to offer its customers cash deposit accounts backed by the Federal Deposit Insurance Corporation. The IRS is seeking account and transaction records for users with cryptocurrency transactions over $20,000 in any year from 2016 to 2021. "Transactions in cryptocurrency have grown substantially in recent years, and the IRS is concerned that taxpayers are not properly reporting these transactions on their tax returns," a lawyer for the government said in court papers filed Monday in Los Angeles. Meanwhile, according to Bloomberg (paywalled), the FTC is "investigating the operators of the BitMart cryptocurrency exchange over a December 2021 hack that led to consumer losses between $150 million and $200 million -- marking the agency's first known probe into crypto markets."

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