Large cryptocurrency exchange Poloniex announced that it is shutting down operations to U.S. users. TaxBit is here to shed some insight and share how to prepare from a tax standpoint. U.S. Poloniex users have until December 15, 2019 to connect their API’s to their TaxBit account or to export their transaction history so that they have records of their taxable transactions.
On February 26, 2018, Circle announced that it was acquiring Poloniex. On October 18, 2019 Poloniex sent the above email informing U.S. users that they are spinning off from their parent company Circle and will no longer serve the United States.
Exchanges shutting down can cause a massive headache for taxpayers who traded on their platform. Fortunately, this situation is not unprecedented and there are learning experiences to ensure this does not interfere with your tax filing. Similarly, in May of 2019 it was announced that Cryptopia was closing down. Many cryptocurrency traders assumed that since they no longer had assets on the exchange that they did not need to take any further steps prior to the exchange closing. Furthermore, because many exchanges that have shut down did not have proper tax reporting, most of the transactional data that is necessary to complete taxes have been lost from closed exchanges. This leaves taxpayers with the obligation to try to reconstruct their trading history through bank statements and receipts, which in some cases can be a near impossible task.
To avoid these problems it is imperative that United States users export their Poloniex transaction history.
To export your Poloniex transaction history: 1) login to your account; 2) hover over the orders tab and select “My Trade History & Analysis”; and 3) Click the export history button.
You will now have a file history of all of your taxable events that occurred on Poloniex’s platform. This file will upload right into your TaxBit account. Alternatively, you can also connect your API from Poloniex to your TaxBit account. This two minute process of exporting your trade history can save you hours of anguish come tax season. If you have any questions then please reach out to TaxBit support.
-Written by Cryptocurrency Tax Attorney Justin Woodward
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