Finance
The hidden cryptocurrency investing risk no-one is talking about
Bitcoin and other cryptocurrencies have been back in the spotlight, after soaring on the back of Donald Trump’s election, then plummeting back down again before getting another boost when the president fleshed out some details about a proposed US crypto reserve.
The risk of dramatic ups and downs in the market are well known, and investors shouldn’t get into it without realising they could lose everything.
However, it’s not the only risk to be aware of – because even if you make money on crypto, you could be felled by tax.
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If you earned the crypto through work, or made it by mining it, then you could be in the frame for income tax. But if you bought it, the tax to worry about is capital gains tax (CGT).
You’ll need to work out what gain you’ve made. You can pool the cost of the coins you’re selling (assuming they are the same type of coins), considering what you paid for each of them, and then working out an average cost per coin.
Then you can work out the gain by subtracting that from the selling price. It means you need to be certain about what you paid for the coins and how much they have gained in value since then.
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You then need to either pay the capital gains tax immediately, using the real time service, or complete a self-assessment tax return at the end of the tax year.
You might not have to pay tax on all of the gain. If some of the coins you’re disposing of have lost value, you can offset the loss against any gains, but you need to report the loss to HMRC in order to do so.
You can also often subtract the transaction fees – which can be substantial when you sell crypto.
All this means you need to keep good records – including the date of disposal, the pooled costs before and after you disposed of them, the number of tokens you have left, and the value of them. You also need to hang onto bank statements and wallet addresses, because HMRC might ask to see any of these things if they carry out a check on your accounts.
Don’t assume your wallet will be the only record you need, because this isn’t necessarily stored for long. The exchange may not even exist when HMRC comes calling.
To some people this may sound like a real faff, and they may wonder whether they need to bother at all, so it’s worth knowing that HMRC works with the major exchanges and can access your customer information and transaction data.
The autumn budget last year also revealed HMRC would be keeping a closer eye on digital assets. Worldwide crypto activity from the start of 2026 will be reported automatically to the taxman – with the first reports hitting at the end of May 2027.
The UK’s financial regulator should consider expanding its oversight to cover advanced artificial intelligence models used in financial services, according to a review commissioned by the Financial Conduct Authority (FCA), as policymakers assess whether existing rules can keep pace with rapidly evolving AI technology.
The Monetary Authority of Singapore (MAS), the city state’s central bank and financial regulator, has joined forces with major financial institutions and FinTechs to release a white paper aimed at keeping AI agents in finance operating within safe limits.
The paper, called Safeguards for Agentic Finance at Runtime (SAFR), lays out an industry-built framework designed to let AI agents perform financial tasks in a manner that is safe, secure and dependable. It has been produced under BuildFin.ai, the MAS programme that backs the responsible creation and rollout of AI tools across the financial sector.
The push comes as AI agents take on more autonomous work at a pace that makes hands-on human oversight impractical. In response, firms require real-time controls that keep agent behaviour inside the mandates, policies and risk limits they have defined. SAFR answers this with a series of governance checkpoints that check and log each action an agent proposes before that task is carried out.
The framework extends the AI Risk Management toolkit created through MAS’ Project Mindforge, concentrating on how protections can be put into practice at the moment an agent acts. The white paper maps out how measures such as policy bound execution, real time validation, auditability and interoperability can be woven into system operations, giving institutions the confidence to deploy agents consistently.
Industry participants have already tested SAFR in several settings. These include agent-assisted payments and treasury work, where agents handle routine transactions inside set mandates to cut friction and lift efficiency; wealth management and advisory processes, where agents examine documents and produce structured assessments within tightly defined task limits to speed up compliance reviews; and client engagement, where agents create insights and draft materials within approved content boundaries so staff can serve clients more productively.
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Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
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