In the field of digital assets, which is more important: nationality proof or residential address? The answer might surprise you—address weight is far higher than that of a passport.

Why do tax authorities around the world place such importance on addresses? Simply put, taxes are based on territory. Most tax agencies worldwide follow the same logic: regardless of which country's passport you hold, your tax obligations depend on where you live and work. In straightforward terms, you are subject to the tax rules of the territory where you reside. This is a hard rule.

This involves a key concept called "tax residence." Its criteria typically include: the number of days lived locally, the economic interests center, the main place of life, etc. Once recognized as a tax resident of a certain place, your global income generally must be disclosed to that jurisdiction's tax authorities.

So why do many people still fill in addresses incorrectly? Many crypto users hold Chinese passports but provide overseas addresses during KYC (Know Your Customer) procedures, which creates hidden risks. On the surface, it appears to be avoiding certain restrictions, but in reality, it is deceiving both the issuing government and the exchanges and regulators. If discovered, at best, the account may be frozen; at worst, legal action could be taken.

Therefore, proper address management and tax declarations are not only basic compliance requirements but also essential measures to protect your assets. In the Web3 era, honest reporting is often the most cost-effective choice.