Crypto copy trading: who reports and how
Copy trading allows for the automatic replication of operations from successful traders. It is an increasingly popular strategy in crypto, but it raises questions about who has the tax obligation.
The two parties in copy trading
The copied trader (signal provider)
When a trader executes operations that are copied by others:
- Their operations are taxed in their own IRPF.
- The commissions they charge from copiers are income from their activity.
- If these commissions are substantial and regular, it may be considered an economic activity (with the obligation to register as self-employed if applicable).
The copier
The copied operations are executed in the copier's account. The resulting capital gains and losses are reported by the copier in their IRPF.
Treatment of commissions paid to the copied trader
Success fees or performance fees paid to the copied trader are an expense of the operation:
- They reduce the net value of the copier's capital gain.
- They are deducted as a cost of the operation.
Example:
- Gross copied gain: €5,000.
- 20% commission to the signal provider: €1,000.
- Net reportable gain for the copier: €4,000.
Copy trading platforms: NAGA, eToro, Bitget…
These platforms generally detail the commissions charged in the statement, which facilitates the calculation. However, extracting the full history can be complicated on some platforms.
Is the copier a "passive investor"?
Yes, from a tax perspective. It does not matter that the decisions are made by the copied trader: the operations are executed in the copier's account, the assets belong to the copier, and the tax responsibility lies with the copier.
Social trading on DEX
There are on-chain copy trading platforms (in DeFi). The treatment is the same, but the history must be reconstructed from the blockchain, as there is no centralized account statement.
Summary
| Party | What do they report? |
|---|---|
| Copied trader | Their own gains + commissions charged (possible economic activity) |
| Copier | The gains/losses from copied operations (net of commissions) |
Conclusion
In copy trading, the copier is the one tax-responsible for their results. Commissions to the signal provider are deductible. If you copy several traders or use multiple platforms, consolidate all results into a single FIFO calculation before reporting.