HMRC backs ‘no gain, no loss’ for DeFi deposits: Aave CEO says it changes everything

Aave’s CEO and cofounder Stanley Kulechov has passed comment on the recently revealed outcome of the UK’s HMRC consultation on taxing DeFi activities that involve cryptoasset lending and staking. 

Published on November 27, 2025, the document mentions a proposal tagged the “no gain, no loss” treatment, and it has been gaining traction because of what it means for users. 

Stani Kulechov commends HMRC consultation

In a post he shared via his X page, Kulechov referenced the official document, highlighting the “no gain, no loss” (NGNL) approach it is offering. 

“A particularly interesting conclusion is that when users deposit assets into Aave, the deposit itself is not treated as a disposal for capital gains tax purposes, creating a ‘no gain, no loss’ (NGNL) approach,” he wrote. 

As far as he is concerned, it is a major win for UK DeFi users, especially those who have an interest in borrowing stablecoins against their crypto collateral.

“I’m proud that our team at Aave Labs participated in the consultation, advocating for DeFi and ensuring that the tax treatment of interactions with lending protocols reflects the economic reality: users are not intending to dispose of their assets when borrowing against their collateral for liquidity needs,” he posted. 

He ended the post by emphasizing that he, as well as those at Aave Labs, are fully supportive of the no loss no gain approach and are looking forward to seeing those changes implemented in UK tax legislation. 

Kulechov is not the only one pleased with the outcome of the HMRC’s consultation; several other notable figures have also responded positively to the release, with many tagging it a step forward and claiming it could be a catalyst for adoption. 

Kulechov’s statement comes not long after he criticized the UK’s BoE 

Kulechov’s positive sentiments came after he criticized the Bank of England’s (BoE) proposal to temporarily cap individual stablecoin holdings at £20,000 and a £10 million cap per firm.

On X (formerly Twitter), he claimed the proposal, which the bank says will stay in place while it ascertains there is no real risk to traditional banks, is a way to choke the market before it has the chance to grow.

“Issuers would be forced to keep 40% of reserves unremunerated at the central bank and only 60% in yielding assets like UK government bonds,” Kulechov wrote. “That makes pound-backed stablecoins inefficient, uncompetitive and unattractive compared with global alternatives.”

According to him, the HM Treasury is likely to copy the approach, which he believes will turn the UK into one of the least appealing places to issue a stablecoin, a direct contrast to what most in the industry want. 

“Instead of boosting the pound’s reach or supporting government gilts, the policy does the opposite,” Kulechov wrote. “The biggest losers? The UK and its consumers. This is another misguided move by the Bank of England, and again we have to fight for freedom.” 

Many people share Kulechov’s sentiment, with a majority of X users claiming the proposal is only an attempt to protect the banks at the expense of innovation.

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