Australia is one of the countries with the highest awareness of cryptocurrency globally, with over 31% of citizens holding digital assets and nearly 1,800 cryptocurrency ATMs nationwide.
Cryptocurrency is currently taxed as property in Australia, and capital gains tax (CGT) must be paid upon disposal. Mining, staking, or payments are subject to income tax.
A court ruling in May 2025 may challenge the status quo, suggesting that Bitcoin could be classified as "Australian currency," potentially exempting it from CGT.
The Australian Taxation Office (ATO) has not yet changed its policy, but the outcome of this appeal could set a significant precedent for future cryptocurrency taxation in Australia.
In 2025, the cryptocurrency tax landscape in Australia is facing significant scrutiny and potential change. As the ATO intensifies its regulation of digital assets, and recent legal developments challenge existing tax interpretations, investors and policymakers are navigating this complex and evolving environment together.
Let’s delve into Australia’s cryptocurrency market and tax policies to see what changes are occurring and whether these changes are favorable for crypto users.
Australia has rapidly become a leader in global cryptocurrency adoption. The 2025 Independent Reserve Cryptocurrency Index (IRCI) indicates that approximately 31% of Australians have ever held or are currently holding cryptocurrency, placing the country among the top adopters worldwide.
With 93% of Australians having heard of at least one cryptocurrency, Bitcoin remains the most recognized and widely held digital asset. About 70% of crypto investors include it in their portfolios.
This adoption surge is not limited to individual investors; institutional interest is also rising. Major financial institutions, including BlackRock, Grayscale, and VanEck, have integrated digital assets into their products.
On June 20, 2024, the Australian Securities Exchange launched the first spot Bitcoin exchange-traded fund (ETF), with VanEck's VBTC beginning trading, marking an important milestone for regulated crypto exposure in Australia.
Australia's cryptocurrency market is supported by a robust network of exchanges, both local and international. Some exchanges operating in Australia include:
Swyftx: Based in Brisbane, known for its user-friendly interface and support for multiple cryptocurrencies. With competitive fees and comprehensive trading features, Swyftx is increasingly popular among Australian users.
CoinSpot: Established in 2013, it is one of Australia’s most mature exchanges, offering over 430 cryptocurrencies. Its high-security standards and user-friendly platform make it particularly favored by newcomers.
Coinbase Australia: The Australian branch of the global exchange Coinbase, registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), providing a secure platform for diverse cryptocurrency trading.
WhiteBIT: A Europe-based exchange that has expanded into the Australian market, offering a comprehensive trading platform supporting over 325 cryptocurrencies.
Additionally, the number of cryptocurrency ATMs in Australia has significantly increased, making it a leader in the Asia-Pacific region.
As of May 2025, there are approximately 1,817 cryptocurrency ATMs nationwide, primarily distributed in Sydney (631), Melbourne (382), Brisbane (319), Perth (159), and Adelaide (110).
However, this rapid growth has also attracted regulatory attention. AUSTRAC has expressed concerns about potential money laundering activities through these ATMs and emphasized that operators must implement strong anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
At the same time, Australia’s regulatory environment is continuously adjusting to accommodate market developments. The Australian Securities and Investments Commission (ASIC) and the ATO have been actively formulating policies to protect investors and encourage innovation.
Did you know? In October 2024, Coinbase became the first official cryptocurrency partner of the Nike Melbourne Marathon Festival. Through this market collaboration, over 35,000 participants received digital medals, with their race results permanently recorded on the blockchain. Additionally, runners had the chance to earn $20 in Bitcoin after completing a transaction on Coinbase, aimed at introducing them to the crypto economy in a safe and fun way.
In Australia, cryptocurrency is considered property rather than currency. Therefore, whether selling, trading, gifting, or using it to purchase goods or services, any disposal of crypto assets triggers a capital gains tax (CGT) event.
The calculation of capital gains or losses is based on the difference between the value at the time of asset disposal and its original cost basis. Notably, if cryptocurrency is held for more than 12 months, individuals may qualify for a 50% CGT discount.
Income earned from activities such as mining, staking, or as service compensation is taxed as ordinary income. The taxable amount is based on the fair market value of the cryptocurrency at the time it is received.
The ATO requires all cryptocurrency transactions to be reported on annual tax returns. In Australia, the financial year runs from July 1 to June 30 of the following year, and tax returns are typically due by October 31 of the same calendar year.
Taxpayers must maintain detailed records of digital asset activities for at least five years, including dates, AUD values, and the nature of each transaction.
To facilitate accurate reporting, the ATO provides online tools and calculators to help taxpayers determine their CGT obligations. The MyTax Portal is the ATO's official tax filing platform, which can be used to report tax matters, including cryptocurrency transactions.
The ATO has strengthened data matching agreements, collaborating with Australian cryptocurrency exchanges to collect customer information, including transaction data and personal identification information. This initiative aims to ensure compliance and identify discrepancies in reported income.
Taxpayers who receive warning letters from the ATO should promptly review their cryptocurrency transactions and correct any inaccuracies in their tax filings as soon as possible.
Decentralized finance (DeFi) activities, such as lending, borrowing, staking, and yield farming, have specific tax implications in Australia. The ATO considers many DeFi transactions to be CGT events, especially when ownership of crypto assets changes.
Additionally, income from DeFi activities is typically classified as ordinary income and assessed at the fair market value in AUD at the time it is received.
Did you know? The ATO has launched a data matching program targeting approximately 700,000 to 1.2 million individuals and entities each financial year. This initiative aims to identify taxpayers who have not reported the disposal of crypto assets in their income tax returns. By obtaining data from cryptocurrency exchanges and matching it with ATO systems, the program seeks to enhance compliance levels and ensure accurate tax reporting.
As a result, the ATO has consistently taxed cryptocurrency as property. So, what changes have occurred?
A local judge in Victoria made a ruling in May that sparked widespread discussion about the classification of Bitcoin and its implications for capital gains tax.
On May 19, a local judge in Victoria ruled on the case of former Australian Federal Police officer William Wheatley, who was accused of stealing 81.6 Bitcoins (BTC) in 2019.
Judge Michael O’Connell ruled that Bitcoin could be classified as "Australian currency" rather than property.
This interpretation challenges the long-standing position of the Australian Taxation Office (ATO), which has classified Bitcoin as a CGT asset since 2014, thus requiring capital gains tax upon its disposal.
The tax lawyer for the case and co-defendant Adrian Cartland stated, "The court has determined that Bitcoin is Australian currency, meaning it is not a CGT asset, and therefore buying and selling Bitcoin will not have tax consequences." If this ruling is upheld on appeal, it could have significant economic implications. Cartland estimates that individuals who have paid taxes on Bitcoin transactions could receive CGT refunds of up to AUD 1 billion (approximately USD 640 million).
The implications of this ruling are profound. If the judgment stands, Bitcoin transactions may no longer trigger capital gains tax events. This would significantly alter the taxation of crypto assets in Australia.
However, it is important to note that this ruling is currently under appeal and has not changed the ATO's enforcement policy. Until further notice, the ATO still requires Bitcoin and other crypto assets to be reported as CGT assets.
Australia's cryptocurrency tax system may be on the brink of significant change. Although the current framework still classifies digital assets like Bitcoin as property, the legal environment is rapidly evolving.
The landmark ruling in May classifying Bitcoin as "Australian currency" opens the door for tax exemptions on the disposal of crypto assets.
But there is a key issue: the ruling is under appeal, and the ATO has not updated its guidance. Until a higher court confirms the reclassification, all individuals and businesses must comply with existing tax regulations.
Looking ahead, 2025 could be a pivotal year for digital asset policy in Australia. Policymakers, regulators, and legal experts are closely monitoring this case, fully aware that its final ruling will not only reshape the legal status of crypto assets but also have economic implications.
For those holding, investing in, and building crypto assets, what is the wisest course of action right now?
Stay informed, keep clear records, and follow the ATO's current directives. Because if policies change, it could happen quickly and be beneficial for you.
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Is Crypto Still Taxed in Australia? Major Legal Update Analysis”
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