Reference Guide · 5-7 min read · Explains the purpose of transaction labels · Affects how your transactions are taxed
KoinX automatically assigns labels to imported transactions whenever possible. However, certain activities - especially those involving DeFi protocols, staking, lending, or manual transfers - may require you to review and update the default label.
Why Do Transaction Labels Matter?
Crypto transactions are often more complex than they appear.
An incoming transaction, for example, could represent taxable income, a loan, a refund, or simply the return of assets you already own. Likewise, an outgoing transaction could be a trading fee, a loan repayment, a staking transaction, or a transfer between your own wallets. Although these transactions may look similar on-chain, they have very different tax implications.
By assigning the correct label, you help KoinX understand the intent behind the transaction. This allows the platform to apply the appropriate tax treatment and generate a more accurate tax report.
How Labels Affect Your Tax Report
Transaction labels don’t change the transaction itself - they change how KoinX interprets it during tax calculations.
For instance, staking rewards are generally treated as taxable income, while borrowing crypto is usually considered a liability rather than income. Similarly, transferring assets between wallets you own isn’t typically a taxable event, even though it appears as both an outgoing and incoming transaction.
Without the right label, KoinX may not have enough context to distinguish between these activities, which can affect how the transaction is reported.
Default Transaction Labels
When KoinX imports your transaction history, it automatically assigns a default label based on the direction of the transaction.
Incoming transactions are labelled as External Deposit, while outgoing transactions are labelled as External Withdrawal. These labels work well for simple wallet-to-wallet transfers or deposits and withdrawals where no additional context is required.
However, if the transaction relates to staking, lending, borrowing, mining, liquidity pools, bridge transfers, or similar activities, you should replace the default label with one that accurately describes what happened.
How to Add or Change a Transaction Label
Updating a transaction label only takes a few clicks.
Go to the Transactions page
Open the Transactions page in your KoinX account.
Locate the transaction
Find the transaction you want to update. You can use the available filters to narrow it down.
Open the label menu
Click the three-dot (⋮) menu next to the transaction and select Label Transaction.
Choose the correct label
Search for and select the label that best describes the transaction.
Save your changes
Click Continue to save your changes.
When Should You Review a Transaction Label?
In most cases, KoinX labels your transactions correctly, so you won’t need to make any changes.
It’s a good idea to review the label whenever the transaction involves activities that can’t be identified reliably from blockchain or exchange data alone. This commonly includes staking rewards, airdrops, mining income, loan transactions, liquidity pool activity, bridge transfers, collateral movements, fixed deposits, and certain trading or network fees.
If the default label doesn’t accurately reflect the purpose of the transaction, updating it helps ensure it’s treated correctly in your tax report.
What Happens If a Label Is Incorrect?
An incorrect label doesn’t alter the blockchain transaction, but it can change how KoinX interprets it for tax purposes.
For example, income may not be recognised correctly, non-taxable transfers could be treated as taxable disposals, or assets that were staked or lent might lose their cost basis history. In some cases, loan repayments, bridge transfers, or eligible expenses may also be categorised incorrectly.
Taking a few minutes to review your transaction labels before generating your tax report can help prevent these issues and improve the accuracy of your calculations.
Some Labels Work Together
Certain crypto activities involve two related transactions - one when assets leave your wallet and another when they return. Examples include staking and unstaking, lending and loan settlement, or sending assets through a blockchain bridge.
For these activities, both transactions should be labelled correctly so KoinX can recognise that they’re part of the same activity rather than two unrelated events. This helps preserve cost basis, prevents duplicate tax events, and ensures your transactions are reported accurately.
We’ll explain these scenarios in detail in our Understanding Paired Transaction Labels guide.
What’s Next?
Now that you understand why transaction labels matter, the next step is learning when to use each one.
Our Incoming Transaction Labels Explained guide covers labels used for deposits, rewards, refunds, loans, and other incoming transactions. If you’re looking for labels related to staking, lending, bridge transfers, repayments, or fees, head to Outgoing Transaction Labels Explained.
If you’re working with activities that involve two linked transactions - such as staking, bridging, or lending - our Understanding Paired Transaction Labels guide explains how these labels work together and why both sides need to be labelled correctly.