- The “Nuggets” where not freely tradable outside of the gaming platform
- The price of the “Nuggets” was heavily manipulated by factors other than supply and demand, therefore the development of the price was more following the rules of the game, rather than an actual market.
- Hence, the “Nuggets” should not be treated as financial assets. They are not subject to wealth tax until they are converted into an actual currency and all gains would be subject to income tax (either as gaming income or lottery income).
Consequences of Altcoins
To the extent Swiss investors own Altcoins that are not traded in a fully developed market, either because they are not listed or because the platform does not allow for a proper price building mechanism, there is a risk that the qualification as financial asset would be denied. It is recommended that investors seek clarity by pre-discussing the nature of their coins prior to realising a significant capital gain.
On type of tokens that needs to be carefully monitored are revenue sharing tokens that operate through a repurchase mechanism. Whilst investors technically realise capital gains when selling such tokens, the tax authorities could argue that the price increase was mainly driven by the repurchase program. For those type of tokens it seems particularly important to establish a proper market that allows secondary trading of the token rather than the investor waiting for the tokens to be repurchased at a higher value.