Are Crypto Exchange Hacks Just Clever Tax Avoidance Schemes?

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Crypto exchange hacks keep on happening, despite companies implementing state of the art security. But, when you look at the timeline of events, a strange coincidence appears to happen – hacks overlap with tax payments. Is it possible that exchanges are using hacks to avoid paying taxes? One crypto Twitter personality certainly thinks so, what do you think?

A Mere Coincidence or Something Afoot?

In a now deleted Tweet, Twitter user Jeff Paik insinuated that crypto exchanges are hacking themselves in order to avoid paying taxes. He stated that in June 2018, Bithumb was asked to pay $30 million in tax, and was hacked 12 days later where $35 million went “missing”. Paik went on to point out that the same happened Upbit was ordered to pay between $50 and $60 million in tax back in January this year. Amazingly, at the end of November, Upbit was “hacked” for a total of $50 million.


Funds Moving Around

In both hacks, the funds were never recovered and the funds were moved around by the hacker. Additionally, the hacks both looked like inside jobs, yet another reason why many people are starting to believe that these could in fact be elaborate tax avoidance schemes. ICO shiller, Ian Balina once pulled a similar stunt, claiming his wallet was hacked and he allegedly lost around $2 million in crypto – an amount close to his tax bill. If exchanges are teaming up with hackers to spoof hacks, it would certainly pay the exchanges to split the money with hackers and save on their tax bill.

While we will never know for sure if this is nothing more than a simple coincidence or if there is something illegal afoot, it’s certainly food for thought. We don’t recommend you claim a you got hacked in order to reduce your tax bill, but if you do it and manage to pull it off we would love to hear from you!