How the Crypto Industry is Increasingly Paying Its Share of Tax
Crypto is now a billion-dollar industry. While reports covering the entire sector are patchy and overly conservative, filings from individual companies speak to the growing scale of crypto, with Coinbase and Blockchain.com alone generating USD 7.35bn and USD 1.5bn in revenue in 2021, respectively.
These are relatively big figures, yet they raise an important question regarding tax. Because with crypto-related companies benefitting from the resources and infrastructure that have been cultivated in part using tax (e.g. educated people, energy grids, telecoms networks), there’s a strong argument to say that they should, in turn, be contributing to the system they’re benefitting from.
So few crypto firms are publicly listed, meaning that it’s nigh-on impossible to say with any certainty how much the sector as a whole actually contributes to public finances. However, industry figures affirm that all legally registered companies comply with all applicable taxation laws in their respective jurisdictions, implying that crypto’s tax bill is indeed growing in parallel with its revenues and profits.
The relationship between the crypto industry and tax is something of a mystery, if only because so many major crypto exchanges and businesses are registered in tax havens.
For instance, Binance’s holding company is said to be currently registered in the Cayman Islands, a tax haven where corporations pay no income, capital gains, payroll, or other direct taxes. Similarly, Bitfinex is registered in the British Virgin Islands, BitMEXand OKX (formerly OKEx) in Seychelles, and Huobi in Gibraltar, to name a few others.
Not only is Binance the biggest crypto exchange in the world by volume, but the registration of so many other major exchanges in
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