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Lost & Stolen Crypto

Losing private keys

Losing the private key to a wallet containing your cryptoassets cannot be treated as a disposal for capital gains tax purposes. The private key still exists as part of the cryptography, albeit it is not known to the owner any more. Similarly the tokens will still exist in the distributed ledger.
However, HMRC confirm at CRYPTO22400 that if the individual can show that there is no prospect of recovering the cryptoassets, they can file a negligible value claim in their Tax Return, to claim a capital loss for these cryptoassets.

Being defrauded

Being the victim of theft resulting in the loss of cryptoassets is also not considered a disposal for CGT purposes, as the individual still owns the stolen asset and has a right to recover it.
If the individual can prove they did hold the cryptoasset tokens at some point (ie they received the tokens they contracted for), yet the tokens have become worthless, they can file a negligible value claim and claim a capital loss on their Tax Return. If the tokens were worthless when acquired, then a negligible value claim wonโ€™t be allowed.
However, those who did not receive the cryptoasset tokens that they paid for may not be able to claim a capital loss according to the HMRC guidance at CRYPTO22450.

Lost Crypto in Recapโ€‹