Scam airdrops and ‘honeypot’ tokens that are designed to steal a wallet’s contents are becoming more and more common across many blockchains that offer low transaction fees. Wallets on these chains are particularly susceptible to being bombarded by scam airdrops due to the low cost of mass airdropping tokens to wallets with a balance above a certain threshold.
These tokens are used in multiple different ways by scammers. Most aim to gain the wallet owner’s attention and prompt them to visit a scam website that then steals personal information or gains access to the wallet. Some are programmed to drain the funds from a wallet if the owner attempts to sell or send the tokens elsewhere. It is important to never interact with unknown tokens or websites as airdrop scams are becoming more common and sophisticated.
Dealing with Scam Airdrops
Many individuals will not realize that their wallet has received scam tokens until it has been uploaded to CryptoTaxCalculator. If you have uploaded a wallet and are noticing ‘incoming’ transactions from unknown sources that you do not recognize, they could be scam airdrops. Some scam tokens will show an extremely high value. This is because the scammers would have created their own liquidity pool on a decentralized exchange in a way that artificially prices the token at a high valuation, enticing unsuspecting individuals to try and sell their ‘airdrop’. If left categorized incorrectly, these scam airdrops could potentially impact your tax outcomes substantially as their artificially high valuation could lead to an inflated income, balance and/or capital gains figure.
Once you are certain a transaction is a scam airdrop, you can manage it quickly and easily through the CryptoTaxCalculator platform. The easiest way to handle these transactions is to use the check boxes on the left of each scam transaction, especially if you have multiple of them.
Once all scam airdrop transactions on the page have been selected, use the tool box on the bottom of the page and mark them as 'spam'.
By doing this, you are telling the platform to not include this transaction in your calculations.
Important Note: The ‘spam’ function should only be used for scam airdrops and should not be used for legitimate airdrops. You should always check with an accountant or other tax professional when using this feature to ensure it is suitable for your situation and tax jurisdiction.