Spain imposes a $10.5 million tax on DeFi investors as crypto loans are recognized as capital gains According to local media reports, a Spanish DeFi investor was required by tax authorities to pay approximately $10.5 million in additional taxes for using cryptocurrency as collateral for loans. The Spanish tax authorities consider this behavior as capital gains, even though the investor did not sell assets or realize profits. The report stated that the investor had previously declared all cryptocurrency transactions and paid $5.84 million in taxes, but three years later, the tax authorities imposed taxes on their use of DeFi protocols to mortgage assets for loans. The tax advisor stated that this interpretation lacks economic and legal basis and contradicts the definition of capital gains in Spanish and EU law. The Spanish tax authorities have sparked controversy by considering stablecoin loans and the transfer of tokens to DeFi protocols such as Beefy or Tarot as taxable events. According to Article 33 of the Spanish Personal Income Tax Law, capital gains must reflect actual economic benefits and changes in net assets.