Cryptocurrencies are becoming increasingly popular and utilised all over the world and especially in Australia. It has become something that can be purchased or transacted in a click of a button and in just a few seconds. With large amounts of businesses and individuals becoming involved in this space it is ever important for everyone to know and understand the legal obligations of using cryptocurrencies. In Australia cryptocurrencies are not recognised as legal tender but rather a form of property or investment asset. Hence, they are subject to Capital Gains Tax when sold or exchanged, just like taxes paid when a share is bought or sold.
Regulatory Frameworks
- ASIC
ASIC has a large influence in regulating and enforcing cryptocurrency legislation. They mainly attend businesses that provide cryptocurrency services, specifically in relation to businesses that facilitate crypto transactions and have ICO’s or initial coin offerings. - Australian Transaction Reports and Analysis Centre (AUSTRAC)
AUSTRAC is more focused on any criminal activity that is conducted though the use of cryptocurrencies. It enforces legislation in regard to issues such as Anti-Money laundering and Counter-Terrorism Financing laws.
Cryptocurrency Mining Laws
Aside from transacting cryptocurrencies, crypto mining has also become prevalent within society and so has more legal questions in relation to this. It is legal to mine crypto in Australia, however miners must recognise and be aware of tax, electricity and environmental legislation.
Future for Cryptocurrency Regulation
In mid-2025 ASIC will publish an updated INFO 225 sheet which will provide substantial information and clarification on how financial services laws will apply to financial assets. This will be supported by Digital Asset Platform (DAP) licensing framework which would essentially make crypto exchanges obliged to the same legislation and supervision as traditional financial entities. As seen the Australian government is acknowledging the increasing prevalence of Cryptocurrencies and are addressing the rising legal issues to predominantly ensure that consumers are kept safe and free from potential fraudulent activities.
Conclusion
Australian crypto regulations put a strong emphasis on legal compatibility on platforms to ensure they provide safe practices. This in turn has ensured consumer safety and these future plans will continue to make the entire cryptocurrency environment even safer.