Handling liquid staking self-appreciating tokens in UK

Tax Questions
#1

An example of this is stader labs ETHX token.

Its price appreciates such that the ETHX/ETH ratio is continuously increasing. That way when you convert back from ETHX to ETH you end up with more ETH than you started off with.

Has anyone handled this in a HMRC-compliant way in koinly? Currently all I am doing is treating the ETH-ETHX and ETHX-ETH conversions as crypto-to-crypto trades and allowing capital gains to arise accordingly. Is this the best way to handle it or has anyone used a different approach?

#2

Hi @Paul_White1

From a technical point of view, what you have been doing is correct, but whether these transactions are taxable or not is a question for your CPA.

Read more in Self-appreciating derivatives (“cTOKENS”) - cUSDC, wstETH

#3

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