Modulis 2 · Security and practice

7/9

Crypto card — spend without taxes

Video · 2 min.

Crypto card

Greta needs 200 euros. Selling crypto or paying by crypto card: a card is a loan, not a sale. We compare the two with real numbers, from the 2,500 euro yearly profit limit in Lithuania to interest and liquidation risk.

Narrated, with light music

The full lesson with numbers and rules is below.

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CEX

This lesson uses concepts from Module 3

This lesson talks about collateral, LTV, and liquidation. If these concepts are new to you, it's worth reading Module 3's lesson on collateral before continuing, then coming back here.

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The problem: a sale can trigger a tax bill — but not always

When you sell SOL or ETH for euros, that's a realized gain. In Lithuania, GPM (Gyventojų pajamų mokestis — personal income tax) may become due on it.

Before you do the math — the 2,500 EUR allowance

In Lithuania the first 2,500 EUR of crypto PROFIT per year is free of personal income tax and doesn't even have to be declared. Tax applies only to the portion above that allowance.

So the card's tax advantage only exists above the allowance. Below it, selling costs 0 EUR in tax while the card still costs interest and adds liquidation risk.

The same allowance is covered in more detail in Lesson 2-8. This isn't tax advice — rates and thresholds change and vary by country; check your own tax authority's current rules.

Example: you bought SOL for 1,000 EUR, and it's now worth 3,000 EUR. You want 500 EUR for groceries. The profit on the sold portion is roughly 333 EUR.

Method	What happens	Tax
Sell SOL (yearly profit still under 2,500 EUR)	The 333 EUR profit fits inside the tax-free allowance	0 EUR
Sell SOL (yearly profit already above 2,500 EUR)	Only the portion above the allowance is taxed	~50 EUR GPM
Borrow against SOL	A loan — NOT a sale, NOT a taxable event	0 EUR

Why isn't a loan taxed?

Under Lithuania's GPM law, a tax event only arises from a realized gain — that is, when you sell an asset. A loan isn't a sale. You still own your SOL. You're borrowing EUR against it. It's like a mortgage — a bank doesn't tax your house when it gives you a loan.

Important: this isn't tax evasion — it's legitimate tax optimization. But rules can change, and tax treatment varies by country, so check your own country's rules and talk to an accountant.

How this works with a Nexo card

Regulatory status (2026)

Nexo does not hold an EU MiCA licence in its own name — it provides EEA services through licensed partners (Tangany GmbH, DLT Finance).

The key nuance: crypto-backed loans and Earn products fall outside the scope of those partners' MiCAR/MiFID permissions and are offered under Nexo's separate terms. In practice that means the card's credit line — the very product this lesson describes — has no MiCA protection layer behind it.

Check Nexo's status in the ESMA MiCA CASP register before depositing a larger position. Don't think of Nexo as a "licensed exchange" — it isn't one.

Once you understand this mechanism, you can fund everyday expenses without selling a single coin — that is, use crypto as a living asset, not just something you'll eventually "cash out" someday.

What is a Nexo card?

Nexo offers a Mastercard crypto card that works like this:

Hold crypto (SOL, ETH, BTC) in your Nexo account
The crypto becomes collateral (an asset that backs a loan)
When you pay with the card — Nexo automatically lends you EUR
You don't pay GPM, because it's a loan, not a sale
The debt accrues interest (~6-13% per year)
Whenever you want, you repay the debt by selling part of your crypto (note: that sale IS a taxable event) or from other income

Step by step

Hold crypto in your Nexo account
If you haven't transferred it yet, see Lesson 1-2 (buying crypto with euros) or 1-8 (sending crypto). Your SOL/ETH/BTC becomes collateral automatically.
Order a Nexo card
Nexo app → "Card" → "Order Card". Virtual card — instant (free). Physical card — mailed to you (~5-10 business days; ~10 EUR in some countries).
Add the card to Apple Pay / Google Pay
You can add the virtual card to Apple Pay or Google Pay right away. The physical one — once you receive it.
Pay as usual
In stores, online, at restaurants — just like with any Mastercard. Nexo automatically "lends" you EUR, and your crypto stays as collateral.
Monitor your debt
Nexo app → "Credit Line". You'll see how much you've borrowed, the interest rate, and LTV (the ratio of debt to collateral value). If LTV gets too high, you can repay part of the debt or add more crypto.

The numbers: card vs. selling

Say you hold 10 SOL (worth ~$1,500 = ~1,400 EUR). Your purchase price was 500 EUR. You want 200 EUR.

Option A: Sell

Portion sold: 200/1400 = 14.3% of the portfolio
Profit on that portion: 200 - (500 × 0.143) = 200 - 71.5 = 128.5 EUR
Annual tax-free allowance: 2,500 EUR
128.5 EUR < 2,500 EUR  →  GPM: 0 EUR (no declaration needed either)
You receive: 200 EUR
SOL remaining: 8.57 SOL

Option B: Nexo card (loan)

You borrow: 200 EUR
GPM: 0 EUR (it's a loan, not a sale)
Interest per year (~8%): 16 EUR
You receive: 200 EUR
SOL remaining: 10 SOL (still the full amount!)

	Selling	Card (loan)
You receive	200 EUR	200 EUR
Tax	0 EUR (profit fits inside the 2,500 EUR allowance)	0 EUR
Interest (per year)	0	~16 EUR
SOL after the transaction	8.57 SOL	10 SOL
If the SOL price doubles	8.57 × $300 = $2,571	10 × $300 = $3,000

The honest conclusion from this example

At this size the card gives you no tax advantage at all — selling costs 0 EUR in tax too. What the card actually gives you here is interest (~16 EUR) and liquidation risk, in exchange for holding 1.43 SOL more.

Whether those 1.43 SOL are worth 16 EUR a year plus liquidation risk is your call alone, and it rests on a price assumption nobody can guarantee.

The card only starts to make tax sense once your yearly realized crypto profit already exceeds 2,500 EUR.

When it pays off

The card pays off when:

Your yearly realized profit is already above the allowance (only then does tax exist at all)
You believe the crypto price will rise (you keep your full position)
The loan's interest rate is lower than your own expected growth (that's your assumption, not a guarantee)

The card doesn't pay off when:

Your yearly profit is still under the allowance — there's no tax to avoid, but there is interest to pay
The crypto price is falling (LTV rises, you risk liquidation)
You don't want to pay interest
The loan size is too large relative to your collateral

And one truth that's easy to forget: the card defers the tax, it doesn't erase it. If you ever sell crypto to repay the debt, the taxable event happens then.

The risks you control

LTV and liquidation

Just like with Kamino or Aave — if the crypto price drops, LTV rises. Your job is simple: know which band you're in, and act before you reach the red zone.

LTV	Situation	Action
< 50%	Safe	Use the card freely
50-60%	Warning	Consider repaying some debt
60-70%	Risky	Repay part of the debt OR add more crypto
> 73%	Liquidation	Nexo automatically sells your crypto to cover the debt

Price drops, LTV climbs toward 73% → repay part of the debt or add more crypto until LTV is back below 50% — you have two simple levers
Liquidation (a forced sale) above 73% → it becomes a sale subject to GPM, so keep LTV below 50% and leave yourself a big margin — that way a falling price never reaches you

The fact of liquidation doesn't go away — but the whole point is that your LTV band is visible in the Nexo app ahead of time. You're not waiting to be surprised; you're the one steering the number.

Interest

Nexo's interest rate depends on your "Loyalty Level":

Nexo level	Interest	How to reach it
Base	13.9%	No NEXO tokens
Silver	12.9%	1% of portfolio in NEXO tokens
Gold	8.9%	5% of portfolio in NEXO tokens
Platinum	6.9%	10% of portfolio in NEXO tokens

The trade-off you have to weigh yourself: to reach Platinum, 10% of your entire portfolio has to sit in a single platform token. That's concentration risk — the NEXO token's price falls together with problems at the platform itself, which is exactly the moment you'd want your collateral to hold its value. The lower interest rate is bought with higher exposure to one issuer.

This is not a recommendation to buy NEXO tokens — it's an explanation of how the programme works.

Practical scenario 1: a small portfolio — the card does NOT pay off

Portfolio: 50 SOL (~$7,500 = ~7,000 EUR)
Purchase price: 3,000 EUR
Unrealized profit: 4,000 EUR

Everyday expenses via the Nexo card: ~300 EUR/month

Over a year:
- Debt accrued: 3,600 EUR
- LTV: 3,600 / 7,000 = 51% — already above the recommended 50% limit (see the table above):
  time to repay part of the debt or add more collateral
- Interest (8.9%): the debt builds up gradually, so in the first year it's ~160 EUR
  (average debt ~1,800 EUR)
- GPM, if you'd raised the same amount by selling:
  realized profit = 3,600 × (4,000/7,000) = 2,057 EUR
  2,057 EUR < 2,500 EUR allowance  →  GPM: 0 EUR

Result: the card COSTS ~160 EUR in interest here and adds liquidation risk,
while selling costs nothing. There are no savings.

Why this example matters

This is a typical beginner-sized portfolio — and in it the card is the worse decision. Before using a card, work out whether your yearly realized profit would even cross the 2,500 EUR allowance. If it wouldn't, there's no tax advantage to capture, only costs.

Practical scenario 2: a larger portfolio — the card starts to pay off

Portfolio: ~25,000 EUR worth of crypto
Purchase price: 8,000 EUR
Unrealized profit: 17,000 EUR (68% of the portfolio's value is profit)

Everyday expenses via the Nexo card: ~1,000 EUR/month = 12,000 EUR/year

Over a year:
- Debt accrued: 12,000 EUR
- LTV: 12,000 / 25,000 = 48% — right at the 50% limit; year two REQUIRES
  a repayment plan
- Interest (8.9%, average debt ~6,000 EUR): ~535 EUR
- GPM, if you'd raised the same amount by selling:
  realized profit = 12,000 × 0.68 = 8,160 EUR
  taxable portion = 8,160 - 2,500 = 5,660 EUR
  GPM 15% = ~849 EUR

Difference: ~849 - ~535 = ~314 EUR in the card's favour in year one.

What that number does and doesn't mean

The benefit here is real but small, and it comes with three conditions:

LTV of 48% — one serious price drop and you're in the danger band. A 314 EUR benefit doesn't compensate for a forced sale at the worst possible moment.
The tax is deferred, not erased — whenever you repay the debt by selling crypto, the tax event happens then.
The 15% rate doesn't apply to everyone — since 2026-01-01, Lithuania's 15% rate covers non-employment income only up to 12 average wages (27,745.80 EUR) per year; anything above that is added to your salary and taxed at 20 / 25 / 32%.

The numbers are illustrative, at 2026-09 rates. This isn't tax advice — check your own tax authority's current rules.

When to use the card, and when to sell

Situation	Recommended approach
Yearly realized profit still under the 2,500 EUR allowance	❌ Sell — there'd be no tax anyway, and the card would only cost interest
Need 100-500 EUR once	⚠️ Check the 2,500 EUR allowance first — selling is usually cheaper
Everyday expenses ~300 EUR/month, yearly profit above 2,500 EUR	✅ Card — but watch your LTV
Need a large amount (>5,000 EUR)	⚠️ Evaluate — will LTV get too high?
Crypto market falling (bear)	❌ Sell — the card is too risky (LTV will rise)
Want to exit crypto entirely	❌ Sell — the card doesn't make sense
Crypto market rising (bull)	✅ Card — keep your position

Alternatives to the Nexo card

Platform	Type	Advantage
Nexo Card	A loan against crypto	No sale = no GPM
Crypto.com Card	Direct crypto sale	Cashback, but a sale = GPM
Binance Card	Crypto sale	Discontinued in the EEA (incl. Lithuania) at the end of 2023 — no longer available
Revolut	Sale from within Revolut	Simplest, but still a sale

Only Nexo = a real loan

Most crypto cards (Crypto.com, Binance, Revolut) sell your crypto at the moment of payment. That's a sale, which means tax. Only Nexo (and similar lending platforms) use a loan model, where the crypto stays yours.

Summary

Aspect	Selling (Lesson 1-10)	Card/loan (this lesson)
Tax	0 EUR while yearly profit stays under 2,500 EUR; 15% GPM above it (and 20 / 25 / 32% above 12 average wages)	0% (loan — but the tax is deferred, not erased)
Crypto balance	Decreases	Stays full
Interest	None	6.9-13.9% per year
Risk	No LTV	LTV + liquidation
Best for	Exiting crypto	Everyday use

Tax disclaimer

This lesson gives general information about how loans are taxed in Lithuania. Cryptocurrency tax rules there are still evolving, and the picture varies significantly by country. Be sure to consult an accountant or tax advisor in your own jurisdiction before relying on this strategy. The author takes no responsibility for tax decisions.

Quick check

Why doesn't paying with a Nexo card normally trigger a taxable event?

Practice task

0 / 5

Work out whether a crypto card is worth it for you

A card doesn't pay off for everyone — it depends on your spending, how much crypto you hold, and your tax situation. Work through it yourself in about 15 minutes.

Card debt is a loan with LTV and liquidation risk: if the crypto price drops sharply, your collateral can be sold off. Never borrow more than you can comfortably repay.

This is learning, not investing — use only small amounts you treat as tuition.

You just weighed loan interest against GPM and made the call with real numbers — most crypto holders never do this and just sell, tax and all.

Futures — why it's dangerous Taxes and companies

Mark as read

Crypto card — spend without taxes

The problem: a sale can trigger a tax bill — but not always

How this works with a Nexo card

What is a Nexo card?

Step by step

Hold crypto in your Nexo account

Order a Nexo card

Add the card to Apple Pay / Google Pay

Pay as usual

Monitor your debt