Nordic Tax Threats Threaten Crypto Hodlers

Here is the English translation: The Scandinavian countries — Norway, Sweden, and Finland — have implemented comprehensive financial transparency policies, where each citizen's financial records, including their name, date of birth, and home address, are published annually. While this tradition stems from a Crypto-like commitment to open and transparent record-keeping, an unforeseen consequence is that it provides criminals with a "hit list" of wealthy citizens to target, particularly those with large self-custodied Crypto holdings. This move has been described by a Norwegian Bitcoin enthusiast as "completely insane, putting a target on every person." Unlike traditional assets held in banks or on stock exchanges, self-custodied Crypto is easily accessible and irreversibly transferable. Funds are accessed through a private key held by the owner, meaning a "5 USD wrench attack" — where criminals use violence or threats to force the owner to surrender their key — is a relatively easy theft method. On May 14, 2018, a Norwegian Bitcoin (BTC) millionaire narrowly escaped death after being attacked in his Oslo apartment by a shotgun-wielding assailant. The attacker threatened the man's life, demanding access to his Crypto holdings. To escape, the victim jumped from his second-floor balcony, accepting the risk of serious injury. Though injured, the 40-year-old man survived the incident. In Sweden, a series of attacks in recent years have seen victims brutally assaulted for holding Bitcoin. On November 8, 2023, Aftonbladet reported that four masked men had bound a Swedish couple and assaulted them with knives. One victim had to be airlifted to the nearest hospital. According to prominent Swedish Bitcoin enthusiast Eric Wall, a recurring pattern in these cases is that "the victim had livestreamed a Bitcoin/Crypto podcast a few days before the attack or had mentioned Bitcoin in a public context." While this is poor operational security for any Bitcoin supporter, Wall also points to Sweden's financial transparency policies as a major factor, as criminals can check their total assets and obtain their addresses through the government's open data.

While the overall number of physical attacks remains relatively low, the Crypto community is concerned these attacks may increase as the number of Crypto millionaires grows due to the BTC price surge. Wall said in 2022 that he had left Sweden for Portugal, fearing for his safety after a series of attacks on Crypto holders related to the "pretty insane transparency laws." "Everything you contribute to capital gains is publicly disclosed," he said.

"It's very easy to pick targets in Sweden, so I dare say I'm probably the most famous Crypto person in Sweden right now. And the second most famous one has recently been attacked at his home. Someone broke into his apartment, brutally assaulted him and his girlfriend, and forced him to surrender his Crypto."

Norwegian Crypto Holders "Especially Vulnerable to Theft"

According to Skatteetaten, Norway's tax authority, at least 48K Norwegians have declared that they own Crypto. The government's online public register, called Skattelister, is available to anyone aged 16 and above. As BTC surpassed $100,000 to reach new ATHs, local media published lists of the country's largest Crypto holders. A potential candidate for such a list, the anonymous Norwegian Bitcoin community figure Hodlonaut, condemned this action on X:

Jaran Mellerud, co-founder of Hashlabs Mining in Norway, told TinTucBitcoin that "criminals are likely happy to receive information serving them from the newspapers, the list-makers who create their own filtered lists of the wealthiest Crypto owners."

"If you own Crypto, you are not safe if people can read in the newspaper that you have a large amount."

Criminals can now cross-reference the data with other public government records to identify addresses. Thanks to the complete transparency of Skattelister, "Crypto holders are especially vulnerable to theft," Mellerud said.

Although the information has been made public, Mellrud criticizes the local media for irresponsibly publishing the list. "The major media outlets have gone beyond their limits in their desperate search for clicks" when they "commodified this material" at least two weeks after the government's release.

"If I was in that top 10 list, I would certainly consider moving to a safer location."

Scandinavian Financial Openness Will Persist

In the Scandinavian region, neighboring countries also place a strong emphasis on openness and equality through financial transparency, with similar but more limited versions of Norway's Skattelister.

Norway publicly discloses the total income, net worth, and taxes paid of all taxpayers, with data easily accessible online. Sweden and Finland publish narrower income data focused on the latest capital gains taxes, with Finland primarily targeting high-income individuals. Unlike Norway, both countries restrict access to information about assets, although the media often compiles and reports on lists of the highest-income individuals.

Concerns about privacy and risks have led some citizens, such as Finnish digital nomad and Sovereign Landing CEO Jaakko Multanen, to leave the country. Although not wealthy enough to be listed in Norway's version, he said the issue was enough to make "returning no longer an option," as he shared on X.

Mellerud believes the state should not disclose the assets and income of anyone, whether they hold Cryptocurrency or not.

However, Norway's Skattelister system, publicly disclosing individual tax information, has existed since 1814. The cultural emphasis on transparency is deeply ingrained in Norwegian culture, but Mellerud believes "the majority don't understand the privacy risks and other consequences of Skattelister."

There is no local political discussion about abolishing Skattelister. "It's an integrated part of our system that I think will never go away," Mellerud said.

Mellerud believes the Skattelister system has been effective in reducing corruption and ensuring tax compliance. However, he notes that its original purpose was served when the internet did not yet exist, making the information less accessible.

"Nowadays, with the internet and social media, these lists spread rapidly, and filtering becomes very easy, so it becomes a major privacy violation."

Tax records were first published online in 2001. Anyone can access this information, and the media can use this data as it is public.

Skattelister's "Wealth Porn" Harms Lower-Income Individuals

The threat to Cryptocurrency holders from Skattelister is not the only negative consequence of financial transparency.

In April 2020, economist and University of California research collaborator Ricardo Perez-Truglia conducted a study on "The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment," analyzing the consequences of this policy.

Aimed at promoting transparency and protecting the less fortunate from wealth inequality, a comparison income game emerged, negatively impacting the well-being and status of poorer Norwegians while boosting the confidence of the wealthy.

"Income transparency had a negative impact on the well-being of lower-income individuals."

The study concluded that "greater transparency increased the happiness gap between the wealthy and the less wealthy by 29%, and increased the life satisfaction gap by 21%."

When the list was placed online, each Norwegian only needed a click to find out everyone else's income in the country. Although the legitimate goal of uncovering corruption or tax evasion remains, it has also turned into a website to check on the information of friends, family, and social connections.

With the available data, users can create rankings showing the highest and lowest income among their Facebook friends or maps indicating the income of everyone living around a specific location.

"During the busiest week of the year, these websites are more popular than even YouTube […] This behavior has become so prevalent that the Norwegian media calls it the 'porn tax,' the study emphasizes.

To address this behavior, since 2014, Norway has made tax record searches no longer anonymous, which seems to have succeeded in using social norms to prevent unwanted uses of data, such as snooping on friends.

The concern about the risks to Cryptocurrency holders is a new phenomenon that Skattelister could not have predicted when it was established centuries ago. The violation of individual financial privacy is an ongoing national debate; however, the risks associated with Cryptocurrency holders are all too clear. Until they are addressed, Cryptocurrency holders may want to follow some security tips to protect their Cryptocurrency.

Dr. Anon, an employee of TinTucBitcoin with expertise in security issues, suggests that Cryptocurrency holders avoid boasting about their wealth, as these attacks are often "your money or your life." In the case of Norway, it is impossible to keep assets secret, so he recommends creating a "honeypot Cryptocurrency wallet with a small portion of assets" so that if a robbery, kidnapping, etc. occurs, one only needs to hand it over and report it to the authorities afterward. It is not worth accepting the risk of being tortured or killed for refusing to pay.

Compiled by TinTucBitcoin