Australia to treat cryptocurrencies as assets, crypto traders disappointed

Australia announces that profits from selling cryptocurrencies will be taxed as capital gains and not foreign currencies. The crypto community is Australia is disappointed with this treatment of digital assets as this increases their tax burden. 

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Australian crypto industry disappointed with crypto tax decision

On October 26, crypto traders in Australia expressed their disappointment with the government’s decision to continue treating cryptocurrencies as digital assets for tax purposes, and not foreign currency. 

On Tuesday the Australian government said in a budget announcement that legislation on enshrining the treatment of digital currencies as assets will be introduced soon. This means investors would pay capital gains tax on profit from selling cryptocurrencies on exchanges where they trade digital assets. 

The Australian Securities and Investments Commission (ASIC) recently sued BPS Financial for misleading crypto advertisements of the asset Qoin. The ASIC said that the advertisements were,

false, misleading or deceptive representations for other crypto assets or fiat currency (such as Australian dollars) through independent exchanges.

ASIC’s argument was that it wasn’t possible to exchange Qoin on independent cryptocurrency exchanges and its promoter gave the impression that its network was growing even as the number of merchants fell.

Since El Salvador’s acceptance of Bitcoin as legal tender the Australian government has been keen on regulating cryptocurrencies and identifying how to tax the asset. The budget announcement made it clear that profits from the sale of cryptocurrencies would be taxed as capital gains. 

Australia has taken a different approach towards government-issued digital currency, or central bank digital currency (CBDC) and it is treated as foreign currency. With the ASIC’s case against BPS Financial, Australia has taken its stand on crypto taxation and rules for crypto advertisements.