As a seasoned crypto enthusiast who has navigated the digital currency landscape for years, I must say that the intersection of cryptocurrencies and financial transparency, as portrayed in this article, is both fascinating and concerning. Having lived in Norway for some time, I’ve experienced firsthand the cultural phenomenon known as “tax porn,” and it’s clear that the advent of cryptocurrencies has introduced a new layer of complexity to this already delicate balance between transparency and privacy.
The Scandinavian nations, which include Norway, Sweden, and Finland, follow a practice of complete financial openness where every citizen’s financial documents are made public yearly, including their personal details such as name, date of birth, and residential address.
Although originating from a principle of openness and transparency similar to cryptocurrencies, this tradition inadvertently creates a list of affluent individuals who store large amounts of crypto themselves. This list, unfortunately, serves as a magnet for criminals seeking to exploit them. A Norwegian Bitcoin enthusiast has termed this action as “utterly insane,” as it essentially marks every one of these people as potential targets.
Unlike conventional assets stored in banks or stock markets, self-custodied cryptocurrency can be quickly accessed and transactions cannot be undone. The funds are retrieved using a unique private key that is under the control of the holders. This means that a $5 wrench attack, which involves criminals employing physical force or threats to coerce holders into surrendering their keys, is a relatively simple way for theft to occur.
As an analyst, I’d rephrase it like this: On May 14, 2018, I, a Norwegian Bitcoin millionaire, narrowly cheated death in my Oslo apartment after a menacing intruder armed with a sawed-off shotgun assaulted me. The attacker threatened my life, seeking access to my cryptocurrency holdings.
In an attempt to flee, the individual leaped off a second-story balcony, potentially causing severe harm. Remarkably, despite suffering injuries, the 40-year-old made it through the harrowing incident alive.
Over the past few years, I’ve observed a series of violent incidents in Sweden where victims have been attacked for their Bitcoin holdings. Recently, on November 8, 2023, I read in Aftonbladet that four masked individuals viciously assaulted a Swedish couple using knives. The severity of the attack required one victim to be helicoptered to the nearest hospital.
Eric Wall, a well-known Bitcoin enthusiast from Sweden, often observes a consistent trend: victims of these incidents had discussed Bitcoin or cryptocurrency in a podcast or public forum just days before they were attacked, or had live-streamed such discussions. It’s important to note that this kind of openness about Bitcoin transactions might not be the best security practice for any Bitcoin user. Wall also emphasized the Swedish financial transparency policy as a significant factor, suggesting that criminals could easily access a person’s total wealth and Bitcoin addresses by exploiting the government’s open data.
As the number of Bitcoin’s price surge leads to a significant rise in crypto millionaires, there is growing concern within the crypto community that this could potentially escalate physical attacks on individuals involved in cryptocurrency, given that such incidents have remained relatively rare so far.
In 2022, Wall informed a Magazine about relocating from Sweden to Portugal due to concerns for his safety following multiple assaults on cryptocurrency owners, which he attributed to the highly transparent laws in the country.
“Everything you’re paying in capital gains is publicly announced,” he said.
“It’s very easy to pick out targets in Sweden, so I would say that currently, I’m probably the most high profile cryptocurrency person in Sweden. And the second-most high profile person recently was attacked in his house. There were people who broke into his apartment, brutalized him and his girlfriend, and forced him to give away his crypto to them.”
Norwegian crypto holders are “vulnerable to theft”
As an analyst, I’ve discovered that, based on data from Norway’s tax office, Skatteetaten, at least 48,000 individuals aged 16 and above have declared their ownership of cryptocurrencies through the public, accessible online portal known as the Skattelister.
With Bitcoin soaring past $100,000 to set new record highs, local news outlets have been compiling lists of the country’s top cryptocurrency holders. A possible contender for such a list, well-known Norwegian Bitcoin advocate Hodlonaut voiced his disapproval of this approach on platform X.
As a crypto investor, I find it concerning that criminals might be exploiting publicly available information about wealthy cryptocurrency holders, as suggested by Jaran Mellerud, co-founder of Norwegian Hashlabs Mining. This data, often sourced and filtered by newspapers, could potentially serve as a roadmap for these malicious actors.
“If you own crypto, you are not safe if everyone can read in the newspaper that you own a vast amount.”
Criminals can now cross-check the data with other governmental public records and pinpoint addresses. Thanks to the total transparency from the Skattelister, “crypto hodlers are particularly vulnerable to theft,” said Mellerud.
Although the information was already made public, Mellrud expressed criticism towards local media for their reckless approach to disseminating the list. He stated that “newspapers are exceeding their boundaries in their frantic quest for readers” and have been “feasting on this content” for at least two weeks beyond when the government published it.
“If I were on that top 10 list, I would definitely consider leaving for a safer location.”
Scandinavian financial openness is here to stay
In the Scandinavian area, surrounding nations prioritize transparency and equality culturally, particularly in their finances, though their approaches may not be as extensive as Norway’s Skattelister.
In simpler terms, Norway makes available to the public the complete income, total assets, and taxes paid by every taxpayer online. On the other hand, Sweden and Finland only share specific income details related to the most recent capital gains tax. Notably, Finland particularly emphasizes high-income earners in their data disclosure. Unlike Norway, these two countries limit access to wealth information, although the media occasionally releases lists of top earners.
Some citizens, such as Finnish digital nomad and CEO of Sovereign Landing Jaakko Multanen, have decided to depart their country due to privacy worries and associated risks. Despite lacking the wealth to qualify for the Finnish equivalent of Norway’s Skattelister, he emphasized that these issues were sufficient to render “returning not even a consideration,” as expressed on X.
Mellerud argues that the state should not publish anyone’s wealth and income, whether they are crypto hodlers or not.
Despite Norway’s Skattelister system, revealing personal tax information publicly since 1814, many Norwegians are not fully aware of the potential risks and other privacy concerns associated with it, according to Mellerud. This cultural prioritization of transparency runs deep in Norwegian society, but Mellerud expresses that most people may be unaware of the pitfalls of the Skattelister system.
There are no local political discussions about removing the Skattelister. “It is such an integrated part of our system that I think it will never go away,” said Mellerud.
Mellerud asserts that the Skattelister system successfully reduced corruption and promoted tax compliance. Yet, he pointed out that this system, which originally thrived in an era without the internet, now makes it more challenging to easily obtain the necessary information.
“Currently, with the internet and social media, these lists are spreading so fast, and filtering is very easy, so it becomes a big infringement on privacy.”
In the year 2001, these tax records were initially made available on the internet for everyone’s perusal. Since it’s open to the public, anyone has the ability to view this information, while media organizations can utilize the data as they deem fit due to its public nature.
Skattelister’s “tax porn” harms lower earners
“The Skattelister threat to crypto owners is not the sole downside of financial transparency; it’s one among several potential drawbacks that may arise due to this policy.
A game comparing incomes was created with the aim of promoting openness and shielding the disadvantaged from wealth inequality. However, this game ended up adversely impacting the welfare and social standing of lower-income Norwegians, while at the same time increasing the self-confidence of the wealthy.
“Income transparency had a negative effect on the well-being of individuals with lower incomes.”
The study concluded that “the higher transparency increased the gap in happiness between richer and poorer individuals by 29 percent, and it increased the life satisfaction gap by 21 percent.”
When the list was made accessible online, any Norwegian could easily discover the income details of fellow citizens across the nation with just one click. Although its initial purpose was to expose corruption or tax fraud, the platform has unfortunately evolved into a means for people to pry into the financial lives of friends, family members, and social acquaintances.
Using the data provided, users can generate rankings displaying the top and bottom income earners within their Facebook network, as well as income maps illustrating the earnings of individuals residing near a particular geographical area.
In the heart of the most bustling week of the year, I found myself drawn to these cryptocurrency platforms, which surprisingly surpassed the popularity of YouTube. This trend became so prevalent that it earned the label ‘tax porn’ by Norwegian media, as highlighted in a recent study.
As an analyst, I’ve observed that since 2014, Norway has implemented a strategy where tax record searches are no longer anonymous. This appears to be effective in harnessing societal norms to deter casual or unwarranted uses of the data, such as nosy snooping on friends.
The risk concerns over crypto holders are a new phenomenon that the Skattelister couldn’t anticipate when it was established centuries ago. The breach of an individual’s financial privacy is an ongoing national debate; however, the risks involved for crypto holders are all too apparent. Until they are addressed, crypto holders may want to follow some security tips to protect their crypto.
Dr. Anon, a CryptoMoon staff member with expertise in security matters, suggested crypto holders avoid boasting about their wealth, as these attacks are frequently “your money or your life.” In the case of Norway, it is not possible to keep wealth a secret, so he advised creating a “decoy crypto wallet with a small portion of funds” so if a “robbery, kidnapping, etc., were to occur, simply hand it over and alert authorities afterward. It’s not worth the risk of getting tortured or killed for refusing to pay.”
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2024-12-19 16:16