How to Navigate the New Era of Digital Currency and Tax Traps with Matthew Walrath

“You can’t surf the wave you’re on the way you surfed the last wave.” —Matthew Walrath

Cryptocurrencies reside in a digital realm where transactions are asymmetrical and exist solely on the blockchain. Also, being a form of property as per the IRS, cryptocurrencies have the potential to bring capital gains and losses that impose tax liabilities.

Crypto accounting is a new ball game, significantly different from the traditional accounting for fiat currency we were used to. Hence, the conventional principles may not apply as is. Due to its volatile nature, tracking crypto transactions can be complex as their value at a point can drastically differ a few hours apart. Moreover, the absence of physical presence and international borders induces much ambiguity. 

In this episode, Crypto Tax Made Easy Founder Matthew Walrath will help us ride the crypto wave without drowning in it. With his “Do-It-For-You” tax service and “Do-It-Yourself” crypto tax course, Matthew has successfully assisted numerous crypto investors, leading to aggregate savings of tens of millions of dollars on cryptocurrency taxes. By offering a promise of completing their tax reports within the next 21 days, he not only ensures monetary savings for his clients but also saves them considerable time and provides them the assurance of properly filed taxes.

Listen in as JP and Matthew help us navigate the tricky world of crypto and taxation. Jump aboard as they unpack crucial topics such as tax regulations in crypto, its software underpinnings, the implications of mass adoption, how AI is optimizing crypto transactions, and how data privacy concerns are being addressed. 

Episode Highlights:

  • 02:28 Crypto Investment
  • 05:15  How Crypto Tax Software Works 
  • 09:57 The Network Effects
  • 13:10 Crypto Mass Adoption
  • 19:07 Crypto and AI 
  • 23:36 Tech Impact on the Future 
  • 25:42 Life Surfing


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    • 08:47 “There are some things that are designed to protect the sensitivity that is coming out that is also above board when it comes to regulation.” —Matthew Walrath
    • 12:46 “This technology is here. The practical applications of it are just boggling to the mind already and  we’re just seeing the tip of the iceberg.” —JP McAvoy
    • 13:27 “If crypto is going to gain some level of mass adoption, it’s not going to look anything like how it looks now.” —Matthew Walrath
    • 21:12 “There are certain functions that we do that are so programmatic. AI is going to be able to do that. And it’s just a matter of somebody creating the right interface.” —Matthew Walrath
    • 23:41 “The pace of life increases. As the use of technology increases the pace at which we do things.” —JP McAvoy
    • 24:30 “We need more good registered tax agents to provide good tax planning advice to their clients.” —Matthew Walrath
    • 25:52 “You can’t surf the wave you’re on the way you surfed the last wave.” —Matthew Walrath

    A Little Bit About Matthew:

    Matthew Walrath, the founder of Crypto Tax Made Easy, first explored the world of Decentralized Finance, NFTs, and ICOs in 2020. Previously dealing in a handful of Bitcoin transactions on Coinbase, he quickly found himself handling over 1000 transactions. This rapid influx left him feeling stressed and overwhelmed during tax season, as his accountant was inexperienced in reporting cryptocurrency transactions.

    However, after months of perseverance and trial and error, Matthew discovered an efficient process for generating accurate cryptocurrency tax reports. More importantly, he found ways to minimize the amount of tax owed.

    Currently, Matthew leverages his experience and know-how to assist numerous cryptocurrency investors, helping them to save tens of millions of dollars collectively on their cryptocurrency taxes. He offers a done-for-you tax service and a DIY Cryptocurrency Tax Course for his clients. Aiming to save time and money, Matthew strives to complete tax reports within a 21-day timeframe. This not only helps his clients save money but also gives them the assurance that their financial matters are being handled correctly.


    JP McAvoy: Hello, and thanks for joining us on today’s show. We’ve got Matthew Walrath, who is solving some of the bookkeeping issues that are arising because of crypto or those who are holding crypto in any event. He joins us here from Australia on today’s show of The Millionaire’s Lawyer, Matthew Walrath. Matthew, thank you for joining us here today. I guess all the way from sunny Australia, which part of Australia are you in?

    Matthew Walrath: You said sunny Australia, so you got it pretty close. The Sunshine Coast is where I live, which is about an hour north of Brisbane, if anybody’s familiar. But if you’re like me, before you go to Australia, it’s pretty much, you know that Sydney is a place and there’s an opera house that looks really cool, and everything else is desert.

    JP McAvoy: Everybody goes to Sydney, head up the coast, I imagine you did some surfing on the way, didn’t you?

    Matthew Walrath: Yeah, yeah. I actually surf every day.

    JP McAvoy: And is that what got you up that way? We’re talking offline, you’re originally from New Jersey and spent some time in California where you’re surfing in California as well.

    Matthew Walrath: Yeah, yeah, I definitely loved surfing growing up while I was living in California. But other things were my favorite thing to do. And then when I moved to Australia, I really got the surfing bug. I live a five minute walk to the beach, and I just go every day now. And it’s become the thing.

    JP McAvoy: It’s a good life, isn’t it? I’ve been on the waves myself and had people  turn to me and say, I wonder what everybody else is doing right now? Are you taking the time to obviously enjoy it. Great stuff. Well, listen, I love to talk surfing all day. The reason we agreed to join and the topic for the day is what we’re going to do with all our crypto profits or losses. I guess as things have been going for the last little while, you’ve obviously seen a number of people that are looking to deal with attachments and making sure that they are addressing what needs to be done with them. Can you tell me more how you’re doing just that these days?

    Matthew Walrath: Yeah. So with crypto taxes, I have a business that we essentially are like bookkeepers. So we help crypto investors to figure out, alright, I’ve done all these transactions, sometimes up to thousands and thousands of transactions. Now, how do I actually sort out how much I owe? How much income have I made from crypto? What are my gains? What are my losses? And ultimately, the way that you have to do that is by using tax software. It’s very similar to QuickBooks. I think a lot of investors think that it’s like TurboTax where it walks you through step by step. It says, give me this document, give me that document. And at the end, it spits out accurate tax reports. That’s not really how the software’s work. At the moment, it’s more like QuickBooks, which is a bookkeeping software. It essentially pulls all your transaction data in, and then it’s on you, as the investor to say, this is what I was doing. This is how that transaction needs to be labeled. This is how that transaction needs to be labeled. And then at that point, you end up with a tax report that you could hand to even the most dinosaur accountant who doesn’t want to think about cryptocurrencies, scammers and things like that, and they’ll still know what to do with it and be able to put it into your tax return. So for people thinking about how am I going to pay the tax man, that’s kind of the process that we go through, and we recommend it for anybody who’s doing it themselves.

    JP McAvoy: Yeah. And regardless of where we are, where we may be listening from, there is a taxing authority. And we’re seeing that said the taxing authorities are becoming much more interested in what has been occurring now, and what is likely to occur, I guess, on a go forward. We’re ideally seeing profits or people having gains on their crypto. I imagine your clients are from all over, and the reports that you’re generating are for their tax accountant in whichever jurisdiction they are, right?

    Matthew Walrath: Correct. Yeah. We haven’t worked with clients in every country in the world. Most of our client bases are US, Canada, UK, Australia, New Zealand. We’ve had some clients in Europe. I’m working with some clients in Germany at the moment because I guess a German Crypto Investment Club found us. So usually, I can figure it out. But those are the countries that we’ve worked with so far. And they all have similar tax laws with their own little quirks. I wish I could pull things from this tax law, pull things from that tax law, put it together and have that be the ultimate crypto tax law.

    JP McAvoy: Yeah, really, that would be most ideal in most situations certainly from a tax perspective. We wouldn’t have to jurisdiction shop for our taxes, or for our most favorable tax treatment. So what do people get if they’re working with you? What do they end up with? They end up with a report, I guess, they provide you. How do they provide you with the information you require? And then what do you end up giving them in return?

    Matthew Walrath: Yeah. When you’re pulling your data into the crypto tax software, they’re going to get data in two ways. If you use a self custody wallet like Metamask, Coinbase wallet, anything where it’s a web three wallet, then you can just use your public address. So that string of characters that is public, not the private one that if you give to somebody that they steal all your data. You can actually just take that, and then you give that to the crypto tax software, and they can just use that address to pull from the public ledger your transaction history. So they pull all that data in. But with a centralized exchange, that’s where it’s not on a public ledger. So you either need to provide what’s called an API, Application Programming Interface key, which sounds difficult, but there’s really easy instructions to just grab it. Again, it’s a string of characters. You plug that in, or you can download your transaction history. And most of those software’s, you can just upload the file, and then it will pull that data in.

    JP McAvoy: That’s interesting. Matthew, even as you describe that. People may or may not be aware that a lot of what they’re doing is on chain. We can talk about a taxing authority, we can talk about just anybody that can actually look up and see what is occurring. When I heard what you just said, the exchanges, so you’re able to search the wallet, obviously, on the exchange, and you’re able to use the information from there. If people are trying to be, let’s say, more sensitive with their wallet, I guess information on what they’re doing, what are some of the techniques people are using?

    Matthew Walrath: In order to make sure that,because all the data is public–

    JP McAvoy: As the lawyer explained to him, it may be anonymous, but it’s searchable. I mean, all these things can be learned and understand how governments are getting involved the way they are, but they can see all of the transactions that are occurring, can’t they?

    Matthew Walrath: Exactly, yeah. And that’s one of the things that is a common critique of crypto as a currency, because it’s like, you wouldn’t really use it as a medium of exchange because it’s a public ledger. You’re not going to go buy medications with cryptocurrency because now there’s a public record of you purchasing that medication, and it can be very sensitive. So there are some privacy protocols, as well as privacy coins where it kind of obscures who is actually making the transaction. Some of them are frowned upon by let’s say the US government that wants to know more notably, tornado cash was a protocol on Ethereum where you essentially can send it in, it obscures and sends other places. And because of the potential that bad actors might use that to obscure the movements of their money, unfortunately, that was something where anybody using that protocol was kind of threatened. And there was some legal action taken by people brought into custody, like the developer of it was brought into custody. So yeah, there’s some scary things around privacy. But there’s also some people who are legitimately building privacy coins, and privacy protocols where governments can have a backdoor in and people might feel like, I don’t even want a government having a backdoor in. So the government’s and the regulatory bodies have a backdoor in. Whereas, the public, the general public cannot see what’s going on. So there are some things that are designed to protect the sensitivity that are coming out that are also above board when it comes to regulation.

    JP McAvoy: Yeah. And it’s so interesting, as you say that because it is attempting to appease the regulator’s, or what’s anticipated from the regulators. In so doing, it comes at the risk of a backlash from the community because these so called backdoors, or ways of looking at things in an attempt to appease NGOs, in some senses or to some people’s view, contrary to what the trustless nature of the cryptocurrency or crypto market is supposed to be. And obviously, people are trying to solve that, or people are trying to find ways of dealing with the natural tension that exists there. What projects do you see that are being more successful in that regard? What projects do you see, maybe those that emerge as having solved the balance that needs to occur there?

    Matthew Walrath: Yeah, man, I’m trying to–

    JP McAvoy: I asked the question from the perspective of, do you know of any that, maybe, and if not knowing the name specifically. Maybe I’ll ask more generally. We see so much being built on Ethereum, do you think if Ethereum continues to be the go to network because is it going to achieve the, you know, the critical mass to become the network?

    Matthew Walrath: Yeah. I think it’s got the network effects. I think the thing that really holds it back is the fact that the transaction fees are super high. So a lot of the applications being built on top of it, like decentralized finance is what got me back into crypto after getting burned in 2017, 2018, and losing a bit of interest. And that application is great. But the thing is the transaction fees of the traditional banking system are lower, or at least were lower than the fees on the Ethereum network. So it kind of hurts that potential application. But now, all of these scaling solutions and these Layer 2s are being built on top of the Ethereum network. And so it seems like Ethereum is now this base layer with a great network effect. And then these other Layer 2 solutions are being built on top of it that are going to continue improving that network effect of Ethereum. So the actual network people might be interacting with might not look like Ethereum, but it might be settling its ledger on Ethereum.

    JP McAvoy: Yeah, ultimately. There’s the ledger where we’re looking to see that it’s being settled on. So I asked this question of all, I know very anecdotally at this point, we’re all continuing to watch and see how things are evolving. Although, as we talk about things like Solana, or I guess some of these other potential networks, they’re still trying to take market share. Do you think that any of them will get there? Do you think Ethereum is actually the one that we’re going to be? In 10 years time, we’re going to still be talking Ethereum as opposed to some of these others.

    Matthew Walrath: Yeah. I think the network effect, even just of the developer community, I think that there’s going to be others. But the funny thing is, you mentioned Cardano, I remember I bought ADA Cardano native token back, I think in 2017, and it was like 50 cents. And today, here we are in 2023, they’ve barely launched any applications on top of the blockchain. I’m sure people who are Cardano fanatics would see that a lot of progress has been made, but then it really doesn’t feel like they’ve gone anywhere still in that market share. The promises, the 2017 don’t seem like they’ve come to fruition five years, almost six years later.

    JP McAvoy: Seems to be quite a preacher. Although, again, as you say, we don’t see a lot of it. And that might be said for a lot of what’s going on in this space itself. We’re obviously having this conversation where people are calling in the midst of the crypto winter, some people have turned away from it. Like the way you describe it lost interest, some people got wrecked and they just walked away from it. You have to think, or at least for the people that I continue to have these conversations with, it’s going to exist in some shape or form. This technology is here. We’re seeing the practical applications of it are just boggling to the mind already. And I think we’re just seeing the tip of the iceberg. I appreciate we’re having a conversation on how to track what you have been doing. What is your bread and butter? But what do you think if you were predicting the way to space maybe built out in the next, well, by 2030 seems to be such a key year that really keeps talking to you?.What do things look like in 2030 in your humble opinion?

    Matthew Walrath: Yeah. I’m a big fan of Nassim Taleb. I’m not like a big forecaster. I’m like, alright, I’m reading what’s happening in reality, and trying to determine what’s the next best action. I think about potential scenarios that can play out, for sure. And I believe that if crypto is going to gain some level of mass adoption, it’s not going to look anything like how it looks now. Right now, it’s very difficult to get into crypto. And now, you’ve got to go through a centralized exchange. And for most people, that’s where the familiarity of the journey ends. You set up an exchange and it might be like you set up a brokerage account to trade stocks, and you’re used to all that paperwork you’ve got to do and how to send money into it, and how to make a trade. But even then, some of the features, the advanced trading features on a centralized exchange look confusing to people. And then as soon as you venture out into interacting directly with blockchains and Web 3 applications, and wallets like Metamask, that’s where it starts to get scary. You might do something wrong and lose a bunch of money. You might forget your seed phrase or your private keys and lose access to a bunch of money. There might be an application that has malicious code, you might sign the wrong contract. And all of a sudden, it drains your wallet. 

    There’s a lot of scary things out there. I don’t think that mass adoption comes from all of a sudden people being comfortable and familiar enough with the current technology that it onboards all these new users. I do think, as we mentioned, a lot of the OGs of the crypto space, not really that interested in regulation and some of the things that are happening there, but that’s what I believe would lead to onboarding more people. You’ll have more companies and more organisations that are building on top of the blockchain, but they’re creating a user interface or user experience where the people have no idea that they’re interacting with crypto. Even your grandma who might be like, oh, crypto is a scam. It’s just a bunch of hucksters. She might not even realize that she’s using something that’s built on top of the blockchain. I think that that’s really what’s going to lead to mass adoption of blockchain technology. Not necessarily more people deciding that they want to put 1% of their portfolio in Bitcoin, or deciding that they want to buy digital art, I think it’s really going to come from something that our minds potentially can’t even conceive of right now.

    JP McAvoy: Yeah. I think that’s really well said the way you just put that together. It’s a function of the onboarding at this stage. It’s not for everybody risks aside from a technology perspective, from an aptitude perspective. Clearly, it’s been a barrier to entry to this point. And for there to be mass adoption, I think you’ve accurately described that there needs to be some easier way to get on and interact. And I think you’re quite right. It’s going to be something where it becomes seamless, or people have what they’re doing is going to be seamless to them in terms of switching between the traditional banking, and whatever app, or whatever way that they’re accessing their crypto. Perhaps, even all through the same. It’s interesting to watch what Elon is up to these days with X. And in conversations about that being, what kind of news is that making in Australia for you?

    Matthew Walrath: I mean, it’s funny. All of a sudden, you can type in Twitter, but you end up on X. It’s not really anything that’s making waves in my world. I’m a pretty active user of Twitter or But other than that, yeah, I’m just interested to see what he’s going to be rolling out. Because obviously, a lot of the things that his companies have done have really disrupted.

    JP McAvoy: They’ve been disruptors, or they’ve changed the way that we think of things. Do you see Doge as being something that can be used for your universal payment system?

    Matthew Walrath: Well, it would be funny if it does. It’s hard to say. When we say universal payment system, all of a sudden, everybody’s gotta be on board with it. I think that there’s going to be some people who kind of push back on a Meme Coin that has a huge amount of the supply being owned by a single unknown wallet becoming something that we use for everyday transactions. I look at those and I’m like, well, I wouldn’t want to store value there. Especially if people don’t know there’s one wallet that owns, I think like 30, 35% of the entire supply of those. So if they decided that they are like, oh, you know what? At this point, I’m a deca-billionaire because of my (inaudible) things, I’m just gonna dump this on all the exchanges. Well, all of a sudden, everybody’s bags are pretty worthless. So I think that there’s a number of risk factors to Dogecoin, that it’s funny to think that Elon would try to push for that, potentially. But at the same time, you know the risk factors that exist. I think there would be a lot of pushback. I don’t think a lot of people would feel super, super comfortable with it if they knew the risk factors involved.

    JP McAvoy: Yeah. And it’s the same thing that we, the theme of this conversation as we’ve been evolving is things look different, perhaps 10, 20 years from now. But there’s certainly some trepidation that will occur between now, and then we’re seeing some of these, even some of these old earth OG, you say waking up,and transactions occurring from there. And again, you can see all of this, right. So you can see tens, hundreds or thousands being transferred to exchanges ostensibly to be sold as well. So there’s a lot of stuff that’s gonna come out in the wash, that’s for sure. And I think the one thing that we can all say with certainty is things are not going to look the same in the future. Things are gonna change an awful lot. Another thing that’s having a great deal and it captured a lot of attention right now is AI as well. Do you know much about AI? You’re looking at any of the rumblings of AI,and how that’s gonna change things on your end?

    Matthew Walrath: Yeah. I’ve definitely tried to stay current with AI because, obviously, I got into crypto so I tend to like disruptive and new technologies. At the moment, I am starting to look into just playing around with, okay, how can AI help to disrupt the space that I’m in? I’m looking at, okay, what are the basis of the current capabilities of AI? How can I start plugging into those API’s and potentially automating some of the work that I do, or some of the workflow so that there’s something that might improve the way that people get their crypto taxes done? So I’m pretty familiar in terms of how it works and what the current limitations are of it. Yeah, I’m happy to chat more about some of that, but that’s how I’m essentially looking at applying it in my world.

    JP McAvoy: Yeah. You’re hitting on something there, Matthew, that people may not even realize when you talk about your QuickBooks and production for taxes. Certainly, the taxman is using AI right now as well to review what’s been submitted. Some people are interpreting AI to be menial, it’s a robot or machine walking around. But that’s not necessarily the case here. Can you talk even for what you’ve seen right now in your own industry how AI is actually being used?

    Matthew Walrath: For example, a lot of the developers in the industry are using Chat GPT to actually help write code and also to help debug code. So I’ve seen that the developers that I’m working with, they’re actually able to just pump out so much more output just because they have something that helps them troubleshoot. And it’s been really fascinating to watch how developers have been like, oh, I’m going to use this to write code instead of writing it myself. So that’s been one thing that’s been really fascinating. The other thing would just be, there’s this threat where certain things like, you’ve probably even seen certain things that a lawyer can do, certain things that an accountant or bookkeeper can do. There’s certain functions that we do that it’s just so programmatic. If this and that, that AI is going to be able to do that. And it’s just a matter of somebody creating the right interface for a user to be able to ask a normal language text based question, and to have an output that prior to that somebody would have to do years and years of schooling, and tons of CPUs, and CPD credits to be able to output.

    JP McAvoy: That’s a great way to look at it for people that are considering whatever they’re working on may be impacted from just that perspective. If I was to ask a simple question in a way that an output can be produced, what does it look like? What is being produced? And be aware that that’s likely where we’re going with this, because these will also be able to build those types of applications much quicker as well. I was looking at coders using it, if not replacing them, certainly making a new coder almost as effective as someone that’s been doing it for a long time. And as they become well versed in the way to use the AI, they may even become a super coder themselves or even surpass. It’s just going to simply impact the way that we do things. What have you got for yourself as we talk about that future? What are the things that look like for you, personally, between now and the year 2030? How does your life change between now and 2030?

    Matthew Walrath: Yeah. I’m a pretty simple man,.I really enjoy surfing and having a coffee after surfing, and barbecuing on a Sunday. Pretty simple in that regard. So I think I’d like to continue enjoying my simple pleasures in life. But I think there’ll be a bigger, bigger family, kids around and teaching them how to surf and that type of stuff. I think, for me, I really get a lot out of just working, researching and staying on the cutting edge of technology. I really enjoy that. That’s for me. That’s what we are. I like the complexity in my life. That’s where I like to go. I like to build businesses, I like to learn about new technologies and actually get my hands dirty, play with them and try to build something. And so I think that for me, I’m going to continue to stay on that cutting edge, and break things, and build things, and build businesses. But then when it comes to my life, I’m still going to be surfing and playing with kids, and just barbecuing on a Sunday.

    JP McAvoy: Sounds like a great way to do it. That’s the balance. Again, the balance, the pace of life increases as the use of technology increases the pace at which we do things. And then they will counterbalance that with some of the things we’d love to do. And certainly, being on the waves is a good way to do just that. So someone’s listening here today, what’s the best way to reach you, find you to maybe discuss ways of helping someone with their crypto tax issues?

    Matthew Walrath: Yeah. So if anybody’s needing help with their crypto taxes, my website is So you can go on there, fill out the contact form if you want to get a quote, you can also learn a little bit about what we do. If anybody listening is an accountant or an EA registered tax agent, we can help you as well. So if you want to get in touch and learn a little bit more about crypto taxes and how you can potentially provide some services to your clients, I’d be more than happy to have that conversation with you because we need more good registered tax agents to provide good tax planning advice to their clients. And I’m more than happy to fill that role, that educator role. And then I’m sure we’ll have some links in the show notes as well for anybody who is a show notes reader.

    JP McAvoy: Absolutely, yes. We’ll put this all in the show notes. I’m grateful for that, Matthew. What you do is you round out an offering that a traditional accountant may be providing as well, and maybe working in a space that they may not be quite as adept. So it sounds like it’s attended, and this can be a sort of hand in hand approach to solving people’s tax needs. You’re creating reports that a tax accountant whichever jurisdiction then uses to file properly. It’s an issue that it’s becoming more and more alive to all of us. It’s great that you’re out there providing one of these solutions that we know is very much needed. I appreciate you being here on the show today. We’d like to end these episodes, and I think you gave us hints of some of the ways that you balance things in your life. But we’d like to, any shows today, with one thing that people listening might be able to take with them through the rest of the day, through the rest of the week after the show drops to give them something in their life, both from a professional and personal vantage point. Is there something that you found through the years that resonate with you? Something that you do that you think would be helpful to pass on to others?

    Matthew Walrath: Hmm, that’s a good question. Lately, I’ve been pondering on this idea of life surfing. And when it comes to surfing, you can’t surf the wave, you’re on the way you surfed the last wave. Otherwise, you’re gonna look like a kook, you’re gonna make a turn where the last wave you should have made a turn, but maybe the waves are flat. On the wave that you’re riding now, you’re gonna fall. It’s not like you can have this careful choreography that you apply to every wave. And I think that the same kind of analogy applies to the way that we surf the waves of life. Past experience might inform us and give us the skills necessary to ride the current wave, but it’s not going to be exactly like the past wave. So if you can stay within the flow or the dance of life and stay within the flow, or the dance of the wave, it’s going to be this beautiful thing rather than this clunky looking choreography that you’re trying to apply. And yeah, that’s something that I’ve been thinking about on the ocean recently. Hopefully the half baked idea that was in my head and hasn’t been communicated yet came across in a way that somebody can use it.

    JP McAvoy: That’s absolutely wonderful. . As you said, life surfing is something that we can all take with us here today. Matthew, thank you so much for this. Anybody listening, please feel free to check out the show notes and reach out to Matthew. We look forward to checking in with you again and seeing what else is going on as you continue your life dance as well. Thank you, Matthew.

    Matthew Walrath: Awesome. Thanks for having me, JP.