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

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Tax authorities in Taiwan can deduct from taxable income the losses of more than 500,000 local cryptocurrency users affected by the FTX trading crisis.

According to Taiwan Block Chain Academia (TBA),The FTX exchange was used by more than 500,000 Taiwanese citizens. Among the 751 FTX users who took part in the Nextapple survey, 38.2% of respondents reported that their estimated losses ranged from $1,000 to $10,000. Another 30.4% of survey respondents estimated their losses to be between $10,000 and $50,000, and 8% could lose between $1,000 and $50,000. $50,000 to $100,000, and 6.9% of respondents had losses ranging from $100,000 to $300,000. 17 people estimated their losses at more than $1 million, with the highest figure being over $7 million.

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

However, FSC stated that it has already repeatedlywarned 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 businesses, can claim their losses when filing their taxes next year to be deducted. In Taiwan, income tax returns for the previous fiscal year are submitted to the Internal Revenue Service from May 1 to May 31.

Meanwhile, local organizationsblockchain organizations, including the TBA and the Taiwan FinTech Association, are trying to reassure 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 could be created to steal data.