My entire crypto was stolen and now I get "Exchange Issue"

Exchange issues
My entire crypto was stolen with a single click and a login. The help request told me to create a new topic in the Exchange Issues category but I can’t find that so I’m posting it here in the “Tax Questions” category.

It also told me to copy and paste the lines below.


Wallet: TradeOgre 2 (TradeOgre)
Transactions: 661
Imported with: CSV

  1. No crypto deposits found
  2. No crypto withdrawals found
  3. 22 transactions are missing purchase history
    ---- Missing 0.39166414 BTC between 2021-03-03 03:57:47 UTC and 2021-05-25 03:51:16 UTC

Is there anything I can do since obviously the math doesn’t add up. My account is at ZERO. How can I bypass this issue to file my taxes as a total loss? Last year I paid tax on the gains. Will I get that money and more back since it’s all lost or is the tax cartel going to screw me too?

Hi @Ez_Duzit,

Thank you for your patience with us and my apologies for the delay in response!

To start, I am so sorry that this happened to you! I can identify with the situation completely and it turns my stomach when I hear about these instances.

I’ve connected with the support agent you’ve been working with, and you’re in the right place with her direction to address stolen crypto within Koinly. She’ll impart how to treat those transactions in your account.

For others wanting to know how to account for any losses due to stolen or hacked crypto like in this case, Koinly has a feature to mark the amount lost by tagging the relevant transactions as ‘lost’. Koinly won’t recognize any gains on these transactions that are tagged as ‘lost’, and you will then see all amounts with this tag in your tax report under ‘Gifts, Donations & Lost Coins’. Please check the link here for more information to Lost, Stolen or Hacked Crypto, and how these can be transacted within Koinly! You can read more about this under the heading ‘How does Koinly deal with lost or stolen crypto?’.

In response to your questions, Ez_Duzit, I would suggest connecting with your accountant/CPA for targeted guidance. In the above blog link in section 2, you’ll see the current IRS resources address these questions. The tax cartel unfortunately signals…

"For casualty losses, the IRS guidance is very clear. Prior to the Tax Cuts and Jobs Act of 2017, these used to be deductible as a loss. However, since the tax reform, the only way a casualty loss could be tax deductible is if it’s a federally declared disaster - which isn’t likely to ever affect your crypto!

So if you’ve lost your private keys, sent your crypto to the wrong address or otherwise lost your crypto due to negligence, you cannot deduct this as a capital loss.

Similarly, theft losses used to be tax deductible. However, theft losses were also affected in the tax reform. They are now no longer tax deductible. So if you’ve lost your crypto due to a hack or scam, you cannot claim it as a loss and offset it against your gains. Incredibly, the IRS actually states the thief has to declare the market value of the stolen property on their tax return!"

There are many ways scammers approach their targets and some bad actors have used Koinly as a means to manipulate as well. Here is an article on these nefarious attempts/people posing as Koinly staff.

If anyone has questions specific to their account, please do connect with our support team on how to account for stolen/scam activity.

Thank you again, Ez_Duzit, for shining a light on this. :raised_hands:

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