Missing Crypto Records Are a Tax Problem

If you own crypto from the early years and your records are patchy, you are sitting on a risk most investors completely underestimate.

Not market risk.
Not trading risk.
Tax risk.

Because in crypto tax, one thing matters more than people realise. Your cost base.

IRD does not tax your story. They tax what you can prove with evidence.

If you cannot prove what you paid, IRD can treat the cost base as zero. That means when you sell, the entire sale can become taxable income.

This is how a small, forgotten 2017 purchase turns into a massive tax bill later. Not because you were reckless. Simply because the paper trail is missing.

Old exchanges shut down. Wallets get forgotten. Emails disappear. CSVs never get saved. Then one day you finally cash out and IRD asks one simple question:

What did you pay for it? If you cannot evidence the answer, your position is weak.

It is usually not active traders who get burned. It is long term holders. The ones who did everything “right” except document the early years.

So if your records are missing, your options are:

1. accept a conservative position (often expensive), or

2. reconstruct the history with wallet data, blockchain evidence, exchange exports, and logic that holds up.

The best time to fix this is before you sell. Our most savvy investors have systems and processes to download their transaction data quarterly incase exchanges close down or their back end changes.

Missing records are not a compliance issue. They are a tax issue.