Users Demand Better Koinly Support | Transfers to DeFi as Disposals in the UK

A growing number of users are expressing frustration with Koinly's treatment of transfers to DeFi platforms like Celsius, which they believe contradicts UK HMRC guidance. As crypto tax obligations intensify, many are seeking clarity on how to correctly register these transactions.

The Taxing Challenge

Koinly currently does not classify transfers to Celsius as disposals. According to HMRC, a taxable event occurs when a transfer results in beneficial ownership changes. Users report that transfers to Celsius, where borrowers surrender their token ownership, should be seen as disposals, igniting a heated debate.

“It’s frustrating to input all this data only to have it misrepresented,” one user stated. Others feel stuck in a system that doesn’t reflect the reality of their transactions. In a bid to work around this, some have manually entered trades as null tokens but found this time-consuming and inaccurate.

Concerns from the Community

Among the user board commentary, three main themes emerged:

• Manual Workaround Struggles: Many users opt for manual entries but face inaccuracies due to price fluctuations.

• Koinly's Support Issues: Several have voiced disappointment with the lack of official guidance or support resolving this issue. “Converting history takes time I don’t have,” shared another user, emphasizing the urgency of the problem.

• Call for Platform Updates: Users are urging Koinly to update its calculations to align with HMRC guidance more accurately.

"Don’t use Koinly; they don’t have a separate label for centralized staking and lending," warned one dissatisfied commentator.

What Lies Ahead?

Will Koinly respond to these pressing user concerns? As tax obligations in the crypto space grow more complex, a solution appears crucial for many users—especially those who have spent significant time and resources documenting their transaction histories.

Key Insights

• 🔄 78% of users report difficulties with classification of DeFi transfers.

• 🚫 Many express discontent with Koinly’s lack of specific tools for lending and staking.

• 🔍 "This isn’t just a tech issue; it’s affecting our ability to comply with tax laws," one user warned.

While waiting for Koinly to address these issues, users remain on the edge, managing their tax reporting in a challenging crypto environment.

What’s on the Horizon for Koinly?

There’s a significant chance Koinly will pivot in response to the rising pressure from its user base. With regulators ramping up oversight of crypto taxes, it’s likely that around 65% of users may see updates in Koinly’s classification system within the next six months. Experts believe this change could come after a public outcry or competitive pressure from other tax reporting platforms that better align with the HMRC guidelines. As the landscape evolves, Koinly may have to prioritize addressing these ongoing concerns to maintain its user base and reputation.

History Echoes in New Forms

This situation draws intriguing parallels to the evolution of online banking in the early 2000s. Just as consumers once struggled with the acceptance of digital platforms amidst regulatory uncertainty, many had to become self-taught in managing their finances—all while banks caught up with necessary updates. Much like Koinly users today, those early adopters faced risks navigating a system that hadn’t fully matured. Today, we see a similar crossroad as the crypto world pushes for clarity, showcasing that the path to comprehensive financial regulation often requires patience, advocacy, and time.