Lead · Tax by Transaction Type
The crypto principal you lent out isn't income — the interest you earn back is. But many people lump the two together when withdrawing.
Olivia Park
·
July 23, 2026
Lending out your crypto to earn interest has become a common income strategy in recent years — whether through a centralized platform's lending product or a decentralized lending protocol, the mechanics are similar: deposit tokens, receive a stream of interest income in return. But this seemingly straightforward interest income actually involves several easily overlooked details on the tax...