What if all the company officials were Russian actors? It turns out that the "Ponzi scheme" I invested in was all run by actors. The actual thief was never identified, and the trading website disappeared! I don't believe there's any chance of ever recovering the money! Can I explain this to the IRS if audited, and still put it down as an investment loss? Also, if I don't put it in as an investment loss, can I use the basis of the crypto purchase on other sales IE; first in, first out rule, as if I still owned the original investment?
So, I have the original basis(purchase price), and the date and price it was transferred to the trading scam. It's obvious it was converted to their trading platform at that time. Should I just report this as a sale of crypto at that time, even though I gained nothing?
I would appreciate some clarification on this. Thanks.
