Argentinian Tax Authority Wins Landmark Case to Confiscate Funds From a Digital Account – Regulators from all over the world are now focusing on the operations of fintech and cryptocurrency companies. In a recent landmark case, the Argentine Tax Authority (AFIP) was successful in obtaining the right to confiscate money from an account held in the country to settle tax bills.
The request, which was initially turned down by a court before being approved in an appeal at the Mar del Plata Federal Chamber, may be the first of many seizures of this nature. The institution will have the right to seize the whole amount owed to the state, plus 15% more to cover interest and processing fees.
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The chamber claims there is no justification for not including these and any future funds, which were kept in a digital Mercado Pago account, as a part of the account holder’s history. The order further states that these technologies cannot be used by taxpayers as a means of tax avoidance and that “the rise of commercial and financial activities through the use of digital accounts imposes the necessity to interpret the law in accordance with the current circumstances.”
This type of wallet was added to the organization’s list of items that could be seized in February. Analysts believe that the same standards that apply to digital accounts may be used to seize cryptocurrency. In addition to serving as stores of value and units of account, digital assets can also be used to make payments, according to Eugenio Bruno, an attorney with expertise in crypto and fintech.
As a result of their ability to act like money, they can be sizeable. However, the management of these assets is governed by who has access to their private keys, and at that point, it may be challenging to carry out a seizure.
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Bruno states:
“In cases where crypto assets are held through exchanges, the eventual AFIP order may indicate that the private keys corresponding to digital accounts of taxpayers affected by the embargoes cannot be used to arrange transfers.”
Argentinian Tax Authority Wins Landmark Case to Confiscate Funds From a Digital Account – The application of the criteria becomes challenging when these keys are not kept by institutions because the user might not hand over their wallet’s private keys to law enforcement.
