The Argentinian Tax Authority has won a landmark case to seize taxpayer funds from a virtual account. This case was decided in an appeal before the Federal Chamber of Mar del Plata. It could lead to more seizures of this nature and may include cryptocurrencies as part of a tighter policy of the organization.
Regulators around the globe have been focusing on fintech and cryptocurrency companies and their operations. The Argentinian Tax Authority has won a landmark case that allows it to seize funds from a digital bank account in Argentina to pay taxes. This request was initially denied by a judge, but then it was accepted in appeal at Federal Chamber of Mar del Plata. It may be the first of many such seizures.
The institution can seize the entire amount owed to it, plus 15% for interest and processing fees. These funds and future funds were kept in a digital Mercado Pago account. The chamber says that there is no reason not to consider them as part of the legacy of the account holder.
The order also states that the “rise of economic and financial activities through the use digital accounts imposes a need to interpret law in accordance the current circumstances” and that these technologies can’t be used as evasion means for taxpayers.
This type of wallet was added to the list of assets that could be confiscated by the organization in February.
Crypto Could be deducted from a digital wallet
Analysts believe that the same criteria used for digital accounts could be used to seize cryptocurrency. Iproup was told by Eugenio Bruno, a cryptocurrency and fintech specialist attorney, that cryptocurrency assets can be used to make payments and fulfill the functions of units and accounts.
They could thus be taken into custody due to their money-like abilities. The management of these assets can be determined by their private keys. It is difficult to execute an eventual seizure.
If crypto assets are held on exchanges, an eventual AFIP order might indicate that private keys corresponding with digital accounts of taxpayers who have been affected by embargoes can’t be used for transfers.
The applicability of the criteria becomes more difficult if these keys aren’t held by institutions.