The Argentinian Tax Authority has been awarded a landmark case that allows it to take taxpayer money from a digital account. In an appeal to the Federal Chamber of Mar del Plata the case resulted in more seizure of funds from a digital account. The organization may also include cryptocurrencies.
Argentinian Tax Authority To Seize Funds from Digital Account
All over the world, regulators have focused their attention on crypto and fintech businesses and how they operate. The Argentinian Tax Authority, (AFIP), has just won a case that will allow it to seize funds in a digital account to pay taxes. Although initially rejected by a judge, the request was then approved in appeal at Federal Chamber of Mar del Plata. This could be just the beginning of many such seizures.
It will have the power to seize the entire amount owed by the state and add 15% for interest or processing fees. The chamber states that it doesn’t find any reason to not consider these and future funds, which were held in a digital Mercado Pago account, as part of the heritage of the account holder.
Furthermore, the order declares that “the rise of economic and financial activity through the use of digital accounts imposes the need to interpret the law in accordance with the current circumstances,” and that these technologies cannot become evasion mediums for taxpayers.
This wallet was added to the organization’s list of assets that could be forfeited in February.
It is possible to also confiscate cryptocurrency
Analysts believe that the same rules could be applied to digital accounts to seize cryptocurrency. Eugenio Bruno is a cryptocurrency and fintech specialist attorney. He explained to Iproup that crypto assets serve the functions of accounts and store of value and can be used for payments.
They could thus be taken into custody due to the money-like abilities. However, the management of these assets is determined by the possession of their private keys, and that’s when an eventual seizure can be difficult to execute.
If crypto assets are being held on exchanges, an eventual AFIP Order may state that private keys corresponding with digital accounts of taxpayers affected by embargoes can’t be used for transfers.
These keys cannot be held by institutions, so the application of the criteria can get tricky. The user might not have their wallet keys available to the authorities.
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