SMSF & cryptocurrency investments (June 2024 Tax Update)

Relevant For:

SMSF trustees involved in, or interested in, cryptocurrency investments

Key Points:

  • The digital currency landscape poses significant risks for SMSF trustees, with frequent reports of scams, theft, and collapsed trading platforms.
  • Many crypto assets are not classified as financial products, leading to unregulated trading platforms and increased risk.
  • Trustees face risks such as fraudulent exchanges, cyber-attacks, platform collapses, forgotten passwords, and scammers impersonating ATO officials.
  • The ATO and resources like Scamwatch and MoneySmart offer guidance on recognising and avoiding scams.
  • Trustees must report all cryptocurrency transactions.
  • For SMSFs accepting cryptocurrency as payment, it should be recorded in AUD, with deductions allowed for qualifying business purchases made with crypto (also be aware of possible GST issues).

Full Article:

The digital currency landscape continues to be treacherous terrain for self managed superannuation fund (SMSF) trustees, with a growing number of reports indicating significant losses due to a variety of factors, including scams, theft and collapsed trading platforms. The ATO is urging trustees to educate themselves on the potential pitfalls of crypto investing, including the fact that many crypto assets are not classified as financial products. This means that the platforms facilitating their trade often lack regulation, increasing the risk of loss without recourse.

The ATO has identified several causes of crypto investment losses:

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