What Are the Tax Implications of the Alleged Binance Wallet Hack (or Any Crypto Exploit)?

  • by:
  • Source: Coin Desk
  • 11/14/2023

This weekend, a crypto hacker cost himself big after successfully draining $27 million worth of tether (USDT) from a cryptocurrency wallet. The wallet in question was reportedly linked to the crypto exchange Binance’s deployer address, according to on-chain sleuth ZachXBT.

The exploit began around 4:36 P.M. on Nov. 11, with the unknown attacker quickly converting the stolen stablecoins for ether (ETH), which was then sent to low liquidity but noncustodial exchanges including FixedFloat and ChangeNow before being converted to bitcoin (BTC), using the permissionless THORChain bridge.

“They will probably deposit the funds to a mixer or send to a sketchy service next,” noted ZachXBT.

The attacker better hope he can access a mixer to launder those funds soon — cause ever step of the way, at least under U.S. law, is a taxable transaction.

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