Investment losses are deductible, theft is not. In other words, if you invest in a legitimate business, and it goes bust through bad luck or even bad management, you can deduct the loss. If someone...
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Investment losses are deductible, theft is not. In other words, if you invest in a legitimate business, and it goes bust through bad luck or even bad management, you can deduct the loss. If someone gets your bank details and drains your account, that is theft and not deductible.
That means there is a gray area around cryptocurrency losses. Since you describe this as a scam, and there is a police report, then the "first look" position is that it is a non-deductible theft. Whether you could reasonably argue that it is a deductible investment loss (after taking a "second look") depends on the totality of the circumstances. It would be your decision if you want to take the deduction and risk an audit. You may want to consult a professional who will stand behind you if you are audited.