- How do I record any lost/stolen tokens?
- What are the common ways your tokens can get lost/stolen and how should I prevent it from happening?
If you’ve ever had any of these questions related to either lost or stolen tokens, this article is for you. In this article we will try to answer these questions, and more.
Ways of Getting Tokens Lost/Stolen
There are lots of different ways your tokens can get lost or stolen. In the following sections, we will go over ways this can happen, and how to prevent it.
Stolen
Stolen tokens become lost when a thief takes control of your account/wallet and transfers your tokens. This can be manual by the thief or via malware on your device. The following ways allow this to happen:
- From your wallet – This can occur when your wallet-seed/private-key gets leaked, or a device that isn’t secured gets stolen. The thief could then transfer your assets out of your wallet and into their own.
- From your account on an exchange – This can occur when your account’s credentials weren’t secure, a data breach leaked your credentials, or the site got hacked into.
To help prevent your tokens from getting stolen and therefore lost, make sure all your account credentials, wallet seeds, and private keys are secure and stored in a safe location. A trusted password manager is the best place for that type of information. You’ll also want to secure your hardware devices as well.
Lost
Unlike when stolen tokens, tokens get lost by sending them to an unsupported wallet address or to a liquidity/staking pool that no longer exists.
To prevent this from happening, just make sure to always double-check the addresses you’re sending your tokens to and make sure that address supports the type of coin you are sending. Also, do research on any liquidity/staking pools to make sure they are credible before putting your coins into them.
Recording your Lost or Stolen Tokens
To report lost or stolen tokens on ACCOINTING.com, just classify the withdrawal transaction as “Lost”. The following example will show what that might look like.
Summary
In summary, your tokens can get lost or stolen by someone getting access to your account/wallet, or by sending them somewhere that is shady/unsupported. To prevent the overpaying of taxes on those transactions, just report them as “Lost”.