Argentina’s tax authority has confiscated more than 1,000 cryptocurrency wallets linked to late taxpayers in the country.
According to a report by local media outlet iProUP, courts across Argentina have authorized the confiscation of 1,269 cryptocurrency wallets owned by citizens with debts owed to Argentina’s Federal Administration of Public Revenue (AFIP).
AFIP indicated its intention to go after crypto wallets belonging to tax arrears in May, and asked cryptocurrency exchanges and payment service providers to submit monthly reports on users of their platform.
Cryptographic services are required to verify the identity of customers and keep records of users’ accounts as well as detailed financial statements including income, expenses, and monthly balances.
With these companies providing the IRS with this information, AFIP has been able to place a ban on holdings in wallets linked to the wrong taxpayers over the past few months.
AFIP’s current standard operating procedures typically target bank accounts and other liquid assets for debt recovery as the first port of call. If the taxpayer is unable to settle his debts or is unbanked, the AFIP will consider appropriation of the individual’s other assets.
The Covid-19 pandemic has given some relief to Argentines who have been in the crosshairs of AFIP, as a 19-month moratorium on asset confiscation has been imposed to ease the financial pressure on citizens.
Related: Argentines Turn to Bitcoin Amid Inflation Fears: Report
The move comes as Argentines continue to embrace cryptocurrency as a way to combat rising inflation, the devaluation of the peso, and general economic malaise. A recent Reuters report citing data from Americas Market Intelligence indicated that Argentina has seen an increase in cryptocurrency adoption that has outpaced other South American countries, driven by citizens seeking a safe haven against rising inflation.
While Argentina’s tax authority focuses on the digital assets of non-compliant taxpayers, its government and central bank have been at odds over the handling of cryptocurrencies.
President Alberto Fernandez made headlines by highlighting the potential of cryptocurrencies to help fight inflation in August 2021, just as Argentine Central Bank President Miguel Pesci hinted at the upcoming regulation of the industry and its intersection with the traditional financial system.