UK HMRC Proposes Expanded Crypto Asset Information Access Powers

UK HM Revenue & Customs is pushing to expand investigation powers over crypto asset information, proposing to allow tax authorities to directly obtain client data from crypto asset service providers, and to update rules for inspecting software and electronic records. UK crypto tax software firm Recap has warned that the proposed regulations define service providers too broadly, potentially covering non-custodial wallet software, blockchain explorers, hardware wallet manufacturers, and tax software providers. As Bitcoin transaction records are publicly transparent, once investors' names, addresses, and tax identities are linked to on-chain wallet addresses, their long-term asset activity records could be exposed, increasing risks of data leaks, extortion, and personal attacks.