Hi
I'm thinking to get a loan from Alchemix (Defi platform)against my crypto. These are self repaying loans. Basically you can borrow up to 50% of your assets value and loan will be automatically repaid overtime but assets will be locked.
Is there any tax implications for this senario?
Thanks
Best to get financial advice as we don't provide that. But the following general information might help.
You use the term 'self repaying loans' with the security being your asset or the cryptocurrency itself.
One tax implication potentially is that cryptocurrency transactions can give rise to ordinary income. Thus your ability to pay down the loan. However taxpayers that accept cryptocurrency as payment have obligations to report that income generated in their tax returns.
The other tax implication also may be if the loan defaulted and the cryptocurrency was disposed of. That of course would be a CGT event.
Best to get financial advice as we don't provide that. But the following general information might help.
You use the term 'self repaying loans' with the security being your asset or the cryptocurrency itself.
One tax implication potentially is that cryptocurrency transactions can give rise to ordinary income. Thus your ability to pay down the loan. However taxpayers that accept cryptocurrency as payment have obligations to report that income generated in their tax returns.
The other tax implication also may be if the loan defaulted and the cryptocurrency was disposed of. That of course would be a CGT event.
Hi Dan
Thansk for the reply. So let's say I borrow $50k against my assets then I'll do the following
No tax paid against 50k or declared in tax return.
When loan start to repay itself, say next year it automatically repaid 10k, then I declare 10k as an income?
Loan won't be defaulted with this DeFi platform.
Thanks
15 Apr 2026 · 8 min read time
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