Asked to pay tax to withdraw your crypto
Legitimate trading platforms never demand an upfront tax payment or clearance fee before allowing you to withdraw your own cryptocurrency. Any demand to send separate funds to unlock an account is an advance-fee fraud, and sending more money will not release your balance.
- This fraud occurs when an online trading platform shows an apparently profitable balance but blocks your withdrawal request, claiming you must first deposit an additional sum to cover capital gains tax, anti-money laundering clearance, or administrative release fees.
- A major warning sign is when staff insist that taxes cannot be deducted directly from your account balance, or when they set urgent deadlines and threaten to freeze your assets permanently if you fail to send fresh funds immediately.
- Stop communicating with the platform representatives immediately and do not send any further money or cryptocurrency, as paying an advance fee will simply lead to further invented demands rather than the release of your funds.
- Preserve all relevant evidence by taking full screenshots of the platform dashboard, fee demands, and chat logs, whilst exporting complete records of your deposit transaction hashes and the recipient wallet addresses you were given.
- Report the incident to Action Fraud online or by telephone, and notify your UK bank immediately if you purchased the cryptocurrency using a debit card, credit card, or bank transfer, as their fraud team may review the payments.
- An onchain trace can map where your deposits moved and identify whether funds reached known custody services, but it cannot override an uncooperative platform, reverse completed transactions, or guarantee that any lost assets will be returned.
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Written by the Wallsec investigations team. General information only, not legal or financial advice.
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