Spain imposes $10.5 million in back taxes on DeFi investors as crypto loans are deemed capital gains

According to local media reports, a Spanish DeFi investor was ordered by tax authorities to pay approximately $10.5 million in back taxes for using crypto assets to secure collateral. The Spanish tax authorities classified this as a capital gain, even though the investor did not sell any assets or realize a profit. The report states that the investor had previously declared all cryptocurrency transactions and paid $5.84 million in taxes, but three years later, the tax authorities imposed tax on the loan secured by using assets pledged through DeFi protocols. Tax advisors say this interpretation lacks economic and legal basis and contradicts the definition of capital gains in Spanish and EU law.