I exchanged a virtual currency for euros, but left the funds in the virtual currency account. Do I still need to pay tax on the gain, even though I have not withdrawn the funds?

Yes. An increase in the value must be taxed separately every time you exercised your virtual-currency position i.e. exchanged it for another currency. Whether you leave the funds in a brokerage service’s account or transfer them to your own bank account is irrelevant.

Page last updated 5/6/2021