Taiwan tax authorities may deduct losses from FTX users when filing tax returns

Taiwan’s tax authorities may deduct from taxable income the losses of more than 500,000 local cryptocurrency users affected by the FTX crisis.

According to the Taiwan Block Chain Academia (TBA), over 500,000 Taiwanese citizens have used FTX. Among the 751 FTX users surveyed by Nextapple, 38.2% of respondents reported that their estimated loss is between $1,000 and $10,000. $50,000 to $100,000, and 6.9% of respondents may have losses ranging from $100,000 to $300,000. 17 people estimated their losses at more than $1 million, and the highest figure was over $7 million.

Due to these disappointing poll results, Lee Guei-min, a member of the Republic of China’s conservative political party Kuomintang, called on the Taiwan Financial Supervision Commission (FSC) to develop a “rescue plan” for FTX users.

However, the FSC said that it has repeatedly warned investors about the risks of trading crypto assets due to their high volatility, as well as the lack of transparency on cryptocurrency platforms. The agency added that it does not intend to cover the losses of local investors who used FTX, since this exchange is not under its control. However, investors, whether individuals or legal entities, can list their losses when filing a tax return next year for their deduction. In Taiwan, income tax returns for the previous financial year are submitted to the Internal Revenue Service from May 1 to May 31.

Meanwhile, local blockchain organizations including TBA and the Taiwan FinTech Association are trying to placate desperate FTX users. They publish various recommendations on how investors can protect their assets stuck on FTX.

Recall that in June, the Central Bank of Taiwan also warned local citizens about the risks of buying collectible tokens (NFTs), which can be created to steal data.