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Exclusive Interview with Tony Dhanjal, the Head of Tax at Koinly


Team CNZ is in conversation with Tony Dhanjal, the Head of Tax at Koinly. He is a recognized crypto tax Subject Matter Expert and a thought leader in this space. He is a qualified accountant with over 20 years of experience spanning across industries within blue-chip organizations, investment banking, and public practice.

About Koinly

Koinly is a crypto tax calculator built for cryptocurrency investors at every level. Users can simply connect Koinly to your blockchains, wallet, and exchanges while Koinly crunches the numbers to accurately calculate each user’s crypto gains, losses, and income. Koinly turns complex transaction history into an easy-to-read report, ready to file with tax offices worldwide.

CryptoNewsZ: Welcome to CryptoNewsZ Tony! Our readers are curious to know whether all cryptocurrencies are taxable? What about crypto in anonymized wallets such as Metamask?

Yes, your crypto is taxable, regardless of the specific crypto coins or tokens you’re investing in or the exchanges and wallets you’re using. All crypto is viewed as a form of property from a tax perspective – whether that’s Bitcoin, Ether, ERC-20 tokens, BEP-20 tokens, or NFTs.

It’s not the kind of token that dictates the tax treatment of your crypto – it’s the specific transactions you make involving crypto. You’ll pay Capital Gains Tax or Income Tax.

You’ll pay Capital Gains Tax on any profit you make from ‘disposing’ of your crypto. Disposal is any event where crypto changes ownership – this includes selling your crypto for cash, trading your crypto for another cryptocurrency and spending your crypto on goods and services, and gifting your crypto (with some exceptions).

Meanwhile, you’ll pay Income Tax when you’re seen earning an additional income through crypto; for example, mining crypto, staking rewards, or various DeFi activities where you earn new coins or tokens may all be considered income. As such, you’ll pay Income Tax based on the fair market value of your crypto at the point you receive it. Even if you’ve paid Income Tax on crypto – you’ll still be subject to Capital Gains Tax on any profits (or losses) if you later dispose of your crypto.

CryptoNewsZ: What about “gifted” crypto such as Airdrops, Play/Shop to earn, or crypto sent from another wallet (e.g., a friend’s wallet)? Are they taxable too?

The tax treatment of these transactions depends on where you are a tax resident.

In the US, gifting crypto is tax-free, provided you haven’t reached your lifetime gift tax exemption of $12.06 million. Meanwhile, other countries, including Canada and Australia, view gifting crypto as a disposition, and any perceived gains are subject to Capital Gains Tax. The UK has a similar view, although gifts to spouses and civil partners are tax-free, which can help investors make the most of the £12,300 Capital Gains Tax-free allowances in their household.

It’s a similar story for airdrops. In the US, Australia, and the UK, receiving an airdrop of crypto is seen as additional income. So you’ll most likely pay Income Tax when you receive an airdrop and become liable to Capital Gains Tax when you later dispose of airdropped crypto. Canada is the exception to this rule as they don’t view airdrops as additional income.

Play-to-engage models are a relatively new phenomenon, and as such, no tax office has released any specific guidance on them. This said, as you’re earning new coins or tokens in exchange for a particular activity – in my opinion, this will likely be seen as a kind of additional income, and you’ll need to pay Income Tax based on the fair market value of any crypto at the point you receive it.

CryptoNewsZ: Do crypto losses impact crypto tax in any way? Do they need to be reported at all?

Yes – crypto losses can mitigate your overall tax bill as you can offset losses against gains.

In most countries – you can offset losses against gains of a similar nature. So you’d be able to offset crypto losses against capital gains of investment assets. Any losses you don’t utilize by offsetting, you can carry forward to future tax years to offset against later gains.

Some countries also let you offset some unutilized losses against ordinary income. For example, this is a maximum of $3,000 a year in the US.

It’s essential to report your losses to your tax office as this registers them. A few countries – the UK included – say losses must be registered with your tax office within a given time frame, or you’ll be unable to carry them over to future tax years.

CryptoNewsZ: Does the rate of crypto tax vary depending on income amount from non-crypto assets/salary etc.? How can Koinly be used to calculate the amount of crypto tax one should pay?

Yes – your crypto tax rate varies depending on your total annual income, how long you’ve held the asset, and the specific transaction.

If you’re paying Income Tax on crypto – regardless of where you live – you’ll use the same Income Tax rate brackets (including state or provincial taxes) for regular income.

For capital gains, each country has a different approach. The US and Australia have lower preferential Capital Gains Tax rates for assets held for more than a year. In other countries like Canada, you’ll only pay tax based on your Federal and Provincial Income Tax rate on half of any capital gain. You’ll pay 10% or 20% tax in the UK depending on your overall taxable income – but only on any net gains over the £12,300 tax-free allowance.

Koinly separates the different kinds of transactions you’ve made by their tax treatment. So your short-term and long-term capital gains are calculated and separated in your crypto tax report. As well as this, any income from crypto is identified and calculated based on the fair market value of the crypto at the point you received it in your chosen fiat currency. All this information is then included in your easy-to-read crypto tax report.

CryptoNewsZ: While using Koinly for crypto tax, does the user need to keep track of all crypto transactions and multiple wallets, or is there any sort of automation? Walk me through the process, please.

One of the significant issues crypto investors face when attempting to calculate crypto tax is that tracking cost basis across multiple exchanges or wallets becomes a nightmare. It’s similarly painful to go back through and identify any income from crypto and then identify the fair market value of that crypto on the day you received it in your fiat currency. Koinly was created to solve these problems.

All you need to do with Koinly is connect the wallet or exchange you’re using via API or upload a CSV file of your transaction history. Once you’ve done this, Koinly does all the hard work of identifying the different taxable transactions, identifying your cost basis, calculating capital gains and losses, and identifying the fair market value of any crypto income. Once the calculations are done, users can simply head to the tax report page in Koinly, where they’ll see a simple summary of their crypto taxes.

Better still, all this is free of charge; it’s only when you want to download a tax report that you’ll need to upgrade to a paid account. Koinly offers a wide variety of tax reports for users worldwide to simplify filing your crypto taxes.

CryptoNewsZ: What are the benefits of using Koinly for a number of subsequent years? Does historical data from previous tax years have any influence on the current tax year crypto tax?

Yes – your transaction data from previous tax years matters when calculating your crypto taxes, and Koinly needs your complete transaction history with every exchange, wallet, or blockchain you’ve used. This lets Koinly identify your cost basis or the fair market value of any crypto correctly and calculate your short-term and long-term gains correctly.

As well as this, tax offices worldwide are increasing the number of crypto tax audits. If you’re ever unfortunate enough to be selected for an audit – Koinly has complete records of your crypto transaction history.

Thanks for your time and insights, Tony. We wish you luck with your future projects.



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