[dnautics]

Think about it this way: you place a trade on December 28th or so that is valued at a few million, then make a series of disastrous trades that bring your account down to 10k in February.

You owe taxes to the feds and state of about 500,000, which you don't have anymore. That is of course carried forward as a loss for the next year, but that only results in reducing taxable income at a potentially lower bracket.

[dopamean]

I'm almost certain there was a guy on r/CryptoMarkets (or one of those crypto currency subs) who this happened to. He apparently traded a few bitcoin up to a few hundred in 2017. Then closed out his positions near the end of the year. Reinvested everything after the new year and lost almost all of it. If that's all true he could be on the hook for a lot of money.

[s73v3r_]

No different than if you had done it with stocks instead.