Investors with inaccessible assets tied up in cryptocurrency exchange FTX Trading Ltd. will need to wait until court proceedings conclude before learning if loss deductions will be available. FTX filed for bankruptcy in early November. Legible, a cryptocurrency tax and accounting platform, has stated that consumers are likely to incur deductible losses but not soon. Instead, because FTX filed Chapter 11 bankruptcy, Legible explained these losses will likely not be recognizable on tax returns until (at least) 2023 once fully ruled on in court. U.S. Treasury Secretary Janet Yellen said that FTX’s downfall “demonstrates the need for more effective oversight of cryptocurrency markets.”
