Currencies, digital dollars, tax dilemmas: exploring the ties between cryptocurrencies and tax aggressiveness

Purpose In the early 21st century, the convergence of corporate social responsibility (CSR) and cryptocurrencies has significantly impacted the corporate and financial world. This study aims to examine the intersection of CSR, more specifically corporate tax behavior, and corporations’ engagement with cryptocurrencies. Since Bitcoin’s emergence in 2008, these digital assets have disrupted traditional financial systems, prompting inquiries about their environmental impact and ethical implications for investors. This research aims to evaluate whether corporations involved in cryptocurrencies exhibit distinct tax behavior compared to those abstaining from these digital assets, with a particular focus on tax aggressiveness. Design/methodology/approach This study analyzes a sample of US-listed corporations that publicly associate themselves with cryptocurrencies, contrasting them with a similar group of corporations that do not. Using binary logistic regression, this study explores the relationship between corporate cryptocurrency engagement and tax aggressiveness, considering factors such as environmental, social and governance (ESG) scores and firm size. Findings The findings indicate that corporations with higher ESG scores are less likely to participate in cryptocurrencies, suggesting a potential perception of these assets as less socially responsible. Surprisingly, less tax-aggressive corporations show a greater inclination toward cryptocurrency involvement, challenging the assumption that such engagement inherently correlates with irresponsible tax behavior. Originality/value This research contributes to broader discussions on CSR, signaling theory and the evolving ethical and regulatory landscape surrounding cryptocurrencies. By examining corporate tax behavior within the context of cryptocurrency participation, this study sheds light on the intricate dynamics at play in this emerging digital landscape.