In 2020, Binance shut off access to all accounts based in the United States due to pressure from regulators. Unfortunately, this move caused thousands of Americans to lose access to their Binance accounts, and by extension, their cryptocurrency holdings.
In this guide, we’ll outline what actions you can take now if you’ve lost access to your Binance account and break down how you can report this lost cryptocurrency on your tax return.
Why did Binance shut down in the United States?
Binance was banned in the United States because it did not comply with U.S. laws and regulations. Exchanges that trade virtual currency derivatives are required to register with the CFTC, which Binance did not do. According to Bloomberg, Binance is still being investigated for circumventing these regulations.
Can I still open a Binance account in the United States?
While Binance.com is no longer operatingallowed to operate in the United States, Binance.US can still be used by Americans. The exchange has a similar user interface, but offers fewer cryptocurrencies and is compliant with U.S. regulations.
How do I regain access to my Binance account?
At this point, it’s difficult to regain access to an American-based Binance.com account, which means some investors have permanently lost their assets and their transaction history associated with their accounts.
Unfortunately, signing up for a Binance.US account does not give users access to assets that were held in a Binance.com account.
Can I claim my lost Binance assets as a capital loss?
Unfortunately, as we detailed in our guide to reporting stolen or lost cryptocurrency, no clear guidance exists from the IRS on how to report assets that are lost due to an exchange shutdown. Some investors choose to report this as a non-deductible casualty loss, while others choose the more aggressive approach of reporting it as an investment loss.
What do I do if I was transferred some of my assets into and out of my Binance account in the past?
Some investors run into trouble if they transferred assets into and out of Binance and other accounts they’ve lost access to. Consider the following scenario.
If Roger is locked out of his account, it will be impossible for him to gain access to his transaction history, which he needs to accurately report his taxes.
If you find yourself in this situation, reach out to Binance’s support team for a copy of your transaction history. If this fails, you should reach out to a tax professionalwho can help you make reasonable estimates of your trading history on your lost account.
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If you find yourself in this situation, reach out to Binance's support team for a copy of your transaction history. If this fails, you should reach out to a tax professional who can help you make reasonable estimates of your trading history on your lost account.
Yes, you can write off crypto losses on taxes even if you have no gains. If your total capital losses exceed your total capital gains, US taxpayers can deduct the difference as a loss on your tax return, up to $3,000 per year ($1,500 if married filing separately).
Instead, it operates a separate site for American traders: Binance US. As noted, Binance US does report to the IRS, and US taxpayers must report their crypto activity to the IRS.
Contact Binance.US customer uspport via this link and attach images of the two documents above. 3. Once received, our team will review your account reactivation request and reach out to you if needed.
What to Do If You Are a Victim of a Cryptocurrency Scam. Report the crime to your local police department. File a report with the FBI. Make sure to include your wallet address (the digital address where you store your cryptocurrency), the scammer's wallet address, and the transaction hash for each transaction.
Binance US uses Form 1099-MISC to report miscellaneous ordinary income to the IRS. The crypto-specific edition of the 1099-MISC is used to report the gross income of traders who receive cryptocurrency rewards or engage in staking.
Yes, all transactions on Binance US involving the disposal of a crypto asset are in most cases taxable. You must also pay income tax on earned crypto such as staking, interest, or referral rewards.
However, Binance does collect and report some information to government entities, such as the IRS, when required to do so by law. For example, Binance may be required to provide information to the IRS if a user on the platform is suspected of engaging in tax evasion or other illegal activity.
Cryptocurrencies are traceable, with transactions recorded on a public ledger accessible to the IRS. The IRS uses advanced methods to track crypto transactions and enforce tax compliance. Centralized exchanges provide user data to the IRS. Use crypto tax tools like Blockpit for accurate reporting and compliance.
Government and law enforcement agencies can use this system to submit information requests. Binance will review each case and cooperate on a case-by-case basis to disclose information as legally required, in accordance with our Terms of Use and applicable laws.
The FBI tracks and traces Bitcoins used in scams and crimes by using specialized blockchain analysis tools to monitor transactions, link addresses, and identify patterns indicative of illicit activities.
Contact Binance customer support: The first step is to contact Binance customer support through their website or app. Provide them with all the necessary information, including your account details, the wallet address that has been stolen, and any relevant transaction details.
You can delete your Binance account on the Binance website or app. Please note that account deletion is irreversible. Once your account is deleted, you won't be able to access it or view any transaction history or data.
Log in to your Binance account and click the Binance Support icon at the bottom right. If you are using the Binance app, tap the support icon on the homepage.
You owe taxes on any amount of profit or income, even $1. Crypto exchanges are required to report income of more than $600, but you still are required to pay taxes on smaller amounts.
The IRS allows you to deduct from your taxable income a capital loss, for example, from a stock or other investment that has lost money. Here are the ground rules: An investment loss has to be realized. In other words, you need to have sold your stock to claim a deduction.
Permanent loss: In most cases, when access to a Bitcoin wallet is lost, the Bitcoins controlled by it are effectively lost forever. That's because, without the keys, you don't have a way to prove to the network you are the owner of those coins (because you can't provide the signature required to unlock the funds).
Despite the risks involved, shorting crypto has advantages, making it a high-risk, high-reward strategy. So, answering if a crypto goes negative, do you owe money? You may have to pay the buyer to sell if the crypto value goes negative when you sell off the bought cryptocurrency.
Introduction: My name is Duane Harber, I am a modern, clever, handsome, fair, agreeable, inexpensive, beautiful person who loves writing and wants to share my knowledge and understanding with you.
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