ConsenSys – the blockchain firm behind MetaMask – clarified that its self-custodial wallet does not collect taxes on crypto transactions, nor has it modified the terms of service to do so.

In an update, the company said the rumor is false and was based on “inaccurate information” while admitting that “legal terminology can be complex.”

ConsenSys Clarifies

The clarification comes a day after several users raised concerns about MetaMask withholding customers’ crypto assets to meet tax obligations. Many of them highlighted one particular section, 4.3, of MetaMask’s terms of service, which reads: “We retain the right to withhold taxes as necessary.”

Addressing the confusion, ConsenSys said the tax section in its terms of service falls under the “fees and payment” section, and it exclusively applies to products and paid plans offered by the company and has nothing to do with on-chain crypto transactions.

Citing Infura as an example, ConsenSys said Metamask’s Application Programming Interface (API) tool has credit card developer subions which include sales tax.

“Legal terminology can be complex, but it’s crucial to emphasize that this section DOES NOT apply to MetaMask or any other products that don’t involve sales tax. We believe in transparency and accuracy when it comes to sharing information with our users.”

The widely circulated misinformation on Twitter even reached the front page of r/cryptocurrency on Reddit, which translated into several other outlandish claims. Comparisons were also drawn to Ledger’s new update – Ledger Recover – which has, so far, met with tremendous resistance from the community.

Privacy Mishaps

This isn’t the first mishap that ConsenSys has found itself in. While the Ethereum studio did manage to debunk rumors about raking in taxes from crypto users, it received significant backlash for collecting their IP addresses and Ethereum wallet addresses towards the end of last year.

ConsenSys admitted to collecting usernames, passwords, gender information, and financial data, including asset holdings, bank account numbers, and bank routing numbers, thus raising privacy concerns in November.

Following the intense pushback, the company issued several updates and clarifications to how it stores user data. In a bid to repair the damages, it further revealed that the data collected via MetaMask and Infura were never sold to third parties.