Tax experts have warned that some cryptocurrency traders could be on the hook for tens of thousands of dollars in unexpected tax bills. | domp
Tax experts have warned that some cryptocurrency traders could be on the hook for tens of thousands of dollars in unexpected tax bills due to the collapse of major stablecoin Terra, despite a crypto market crash pushing many investors into the red.
However, tax professionals have warned traders who participated in popular crypto “staking” schemes could find themselves with unexpectedly high tax bills this year.“Staking” is similar to term deposits, where holders of crypto agree to lock up their assets for periods of time, in exchange for a percentage-rate reward. The staked assets also help run the blockchain network.
“It can occur with share investments and other sorts of investment schemes but, with crypto, given the volatility and the higher level of risk, the consequences can be greater,” she says. “Especially as some investors are quite inexperienced and aren’t aware of the tax consequences.
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