How to Handle renBTC and WBTC

renBTC and WBTC are wrapped BTC. This means that a ERC20 representative token is minted for use on the Etherium network and DEFI. The BTC is held in custody until the token is eventually redeemed.

I created custom wallets to represent these services (REN VM & WBTC Cafe). The problem is that the outgoing tokens from the services always have issues with “missing purchase history”.

I do not believe that these tokens represent a “sale” as they are custodial and return your BTC on redemption of the token - so they are more like a loan.

Is there a correct way of dealing with this or a workaround for this issue? Or am I doing something incorrectly?

thanks!

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@koinly There are may other wrapped tokens with similar scenario. Would like to know as well how to handle these transactions. Thanks

If you are sending your BTC to a service which is sending renBTC back into an ETH wallet then you would modify the “send” transaction to be a trade of BTC to renBTC. This would be a taxable event as its a trade of one crypto for another even though both are worth the same. We will be adding a tag soon to remove gains from such transactions for users that dont want to treat them as taxable.

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Any time-scale on the proposed tag? Thanks

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I have the same issue with WETH/ETH which I have raised separately. It doesn’t seem correct that it should be taxable, so a method of preventing gains between them would be good, especially so if it didn’t have to be repeated on every single transaction where it happens, e.g. a site wide setting to ensures transfers from wrapped to unwrapped are non-taxable. Yes Koinly would then need to maintain a table of equivalent coins, but the solution is much more satisfactory than individually adjusting transactions.

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And most importantly, make it compatible with existing modifications. Can’t have every update say, we need to re-import everything and start from scratch.

@geozy I believe this has been added; you tag it as a Swap, but it doesn’t work for Shared Pool cost basis (UK) yet. Waiting on the release that resolves this eagerly.

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Thanks for letting me know - I shall wait patiently! Is there a way to be automatically informed when this update for the UK happens? Thanks!

We will create a product announcement when this is out for share pooling.

If you transfer the BTC from a wallet (synced) directly with the dedicated button of Curve.finance and get the token CrvRenWSBTC (w=wrapped, s=synthetix). I see wrapping as tax free and the age of the token should get taken over to keep my long position.

Should we tag the crosschain-import as swap and in the btc wallet the export as transfer? Or both as swap? Hope it gets internally recognized and matched with the similar values, doubt it should input the fee twice on both sides.

Quite tricky with this double ledger system.
Keep up the amazing work guys!