After hacking thousands of wallets, Solana users became stole nearly $8 million in crypto.
Maybe it couldmitigate the damage this terrible incident caused some. Australian, Canadian and British investors can indeed declare the compromise of their wallets as a tax loss according to experts.
Until now, Solana users had to move their funds to other, more secure locations. The tension is still evident given the still unclear circumstances surrounding the Solana hack.
What happened to the Solana crypto?
On Wednesday July 27, 2022, the web went up in flames when almost 7000 crypto wallets have been hacked by as yet unknown attackers. Notably, Solana-based services such as Phantom and Slope were among the first to report the attack on their social media.
To gain access to Solana customers’ wallets, the hackers forced access to their private keys. This allowed them to siphon victims’ accounts without leaving a trace.
The investigation is ongoing and the motives are emerging
For now, users should play it safe. enough scammers are riding the wave and offering to help users overcome this problem. These are again scammers who aim to exploit the current situation to their advantage.
Anyone who reaches out to you for a solution to this problem is scamming you. The only thing to do is to transfer the rest of the funds to more secure places like a hardware wallet.
Solana’s spokesperson has spoken about the situation and says that every resource is applied to find out the deep reason behind this hack. According to some blockchain analysts, attackers could have exploited a loophole in the supply chain that gives access to private keys. This flaw seems to be exclusive to IOS.
At the moment it is it is not clear whether SOL holders will be able to recover their funds.
At the same time, SOL seems to have recovered after the hack with a price at the lowest level from July 26 to 27, 2022
Declaring a tax loss, the solution to SOL
There is still one hope for the injured at this dramatic event. CEO of CryptoTaxCalculator, Shane Brownsaid that crypto lost in a hack could be declared as a tax loss in certain cases and under certain jurisdictions.
Shane Brunette tells us about this tax loss solution:
This means that the principal amount you paid for the asset(s) can be used to offset other capital gains.
It is, therefore, a sign of hope for the few thousand investors who got their investment dispossessed in a few hours.
Solution subject to conditions
However, it will not be possible for everyone to benefit from this trick. The IS Each country’s regulations are different. and an upstream investigation into its specificities is necessary to determine whether or not this process can be initiated.
Tax loss in Australia, Canada and the UK
Here are the steps for each country to declare a tax loss:
- Australia : in Australia a tax loss can be declared. You will need to prove to the Australian Taxation Office that the lost crypto is yours and that it was indeed stolen. To create a hack, you must also provide the dates of acquisition and loss of the private keys.
- In Canada and the United Kingdom : the procedures are a bit more complicated than in Australia. To minimize tax losses, aggrieved investors should carefully follow the steps provided by each country’s tax office.
United States: ban on declaring tax losses on cryptos
The IS Unfortunately investors based in the United States will not have the right to exercise this solution. The 2017 tax reform prevents investors from being reimbursed for this type of loss.
The latter must then be patient in the hope that the lost funds will return as a result of the research carried out. Currently, the investigation is well underway and several explanations for the problem are emerging.
Can we declare a crypto tax loss in France?
The IS France provides a tax deduction for losses in crypto currencies. So a tax loss can be declared if you lost your crypto funds during an attack for example.
You can’t, though offsetting your losses with similar assets only. In other words, if you lose money on cryptos, you will only be able to use your recovered capital to make further crypto gains there.
This solution still allows you to engage in cryptocurrency investments in a more serene way than in the United States!
To learn more about the Solana hack, visit our detailed page here.