What happens when an exchange declares bankruptcy?
Many investors want to know their options for taking a tax write-off related to funds locked on bankrupt platforms like Voyager, FTX, BlockFi & Celsius.
Tax write-offs can save you thousands of dollars in taxes. However, if you don’t handle them correctly, you will increase your chances of being audited by the IRS or have undesired results. Knowing how these write-offs work and when to apply them will help you avoid such pitfalls.
As these cases move through the courts, you must stay current. Any new developments can change which deduction options are available to you when you can take a deduction, and how much you can deduct.
We have blog post written by one of our tax experts with much more information on next steps and frequently asked questions about exchange bankruptcy: What are your options for reporting losses related to Bankrupt Exchanges?
Information About Specific Exchanges
FTX
FTX Bankruptcy and CoinTracker FAQ
Celsius
Celsius recently distributed crypto assets after emerging from bankruptcy. Our tax experts have published a blog post to address this: Reporting Celsius bankruptcy payments
If you need to upload your Celsius transaction history, you can do so here: Import Celsius Transaction History CSV
We recommend consulting a tax professional or advisor for personalized advice based on your situation. They can provide expert guidance on how to account for the Celsius distribution and ensure compliance with relevant tax laws. Our CoinTracker Connect tax professional partners offer various tax services that could assist you.