Experts Have Testified That a Tax Loss for Crypto Stolen from Solana May Be Claimed

According to taxation experts, investors from Canada, Australia, and the United Kingdom might be able to utilize a tax loss on hacked crypto. Due to state/federal taxes, US investors will not be able to take advantage of this chance.

According to experts, you may deduct digital assets lost as a result of a hack or exploit if you reside in the correct nation.

This may be some much-needed consolation now that you know that more than 8,000 Solana wallets were hacked and about $8 million worth of cryptocurrency was stolen due to a network breach in Slope’s Web3 wallet provider.

In certain jurisdictions, according to Shane Brunette, the CEO of CryptoTaxCalculator in Australia, crypto may be designated as a loss for tax purposes after a hack or an exploit. This implies that the original amount you paid for the asset(s) can be utilized to reduce other capital gains.

“To claim a capital loss for cryptocurrency stolen, you must provide evidence to the Australian Tax Office (ATO) that your crypto was lost and in your possession at the time of the heist (Arthur Rizer of BKF Law Group). You can’t just give your bitcoin away and then say you don’t want it anymore. Until a transaction is finished or its conditions state otherwise, you must retain it.”

According to Sunil Talwar, the head of the David Suzuki Foundation’s Blockchain and AI Lab, taxing authorities must have substantial proof that cryptocurrencies can’t be recovered. He emphasized the importance of tax authorities having destination addresses to authenticate evidence on the hacker’s destination address, which might provide proof of a large pool of stolen money.

Any proof of a breach must also include dates for when private keys were obtained or lost, as well as all wallet addresses connected to the hack.

Things are more difficult in the United Kingdom and Canada, but a tax loss claim is feasible if investors are willing to go through the unique procedures outlined by each country’s tax agency.

With hackers and unethical actors siphoning off hundreds of millions of dollars worth of digital assets every year, the total sum stolen is now an estimated $2.6 billion. Cross-chain bridge assaults, accounting for 69% of the entire amount lost, have been carried out by hackers and malicious actors this year alone.

Crypto Tax Calculator Australia is an important and useful application, which takes the hassle and stress out of crypto calculations. Customers simply upload their CSV file into the application and moments later recieve their tax report. This report can then be used at tax time by either lodging it themselves or their tax agent lodging it for them. We encourage all our Australian customers to use this tool to make tax season less stressful.