This warning shows up when you are sending or trading an amount that is higher than your balance at the time of the transaction. It is usually an indication that some prior transactions are missing.
For ex. if you withdraw/send 10 BTC from a wallet that has 0 balance then Koinly will show you this error.
Do I need to fix this?
That depends. Basically these warnings mean that you have no purchase history for some of the coins that you are sending/trading, so Koinly assumes you got them at no cost (i.e. for free).
This means if you ignore the warnings you will not be able to deduct any costs and will end up paying a tax on the full amount that you sell them for later on.
Tldr. ignoring them can result in more tax!
Koinly can show you how much extra tax you will end up paying. Navigate to the Tax Reports page, you should see a message similar to this:
If the amount is low/insignificant then you can just ignore the warnings and go ahead with your Tax Report. However, if the amount is quite high then it could mean that you are missing some important transactions so you will need to fix them.
But I am using API to import my data...
Sadly, most exchanges do a very poor job of providing access to your historical data via API. Most will not provide access to trades on delisted market pairs and some only provide access to the last couple months of data.
To see the limitations of your exchange, do this:
- Click on the exchange on the Wallets page
- Click on the 3 dots next to Auto-sync enabled box
- Click on Edit
- On the page that opens up you will be able to see any limitations with the API. Read the yellow warnings carefully as it can save you a lot of time.
Easy way of fixing these:
- Delete the wallet and create a new one with the CSV Import option
- Download CSV files for all your trades/deposits/withdrawals from the exchange. If you can't find these files, contact the exchange's support team. They will be able to send these to you in most cases.
- Import these files one by one to Koinly
- Check if the warnings have disappeared after importing all files
- Optional: Setup the auto-sync for the exchange again but make sure the "Skip history" option is enabled so the API doesn't create duplicate transactions.
I imported my CSV files but I am still seeing these warnings...
First, make sure you have really imported all data.
- Check the date of your oldest trade, deposit and withdrawal. Does it match what you are seeing on the exchange?
- Some exchanges only allow exporting data in chunks of 3 months, so make sure you are importing all of the files.
If the warning is showing a missing purchase history for very small amounts ex. 0.00005 BTC then it could be due to rounding issues so you can just ignore them.
However, if you are seeing bigger warnings then you will need to follow our "How to Find Missing Transactions" guide.
Can the Tax Office object if I submit a tax report with these errors?
No. Koinly uses zero cost basis for coins that do not have a purchase history. This is what tax authorities recommend as it means you pay tax on the full amount when you sell the coins (without deducting any costs).