A recent criminal court ruling in Australia has reignited debate over how cryptocurrency should be taxed. In a case involving a federal police officer accused of stealing 81.6 Bitcoin in 2019, Judge Michael O’Connell ruled on May 19 that Bitcoin should be treated as money—a significant shift from the long-standing view of the Australian Taxation Office (ATO), which classifies crypto as a taxable asset.
Judge O’Connell’s decision suggests that Bitcoin is more akin to traditional currency, like the Australian dollar, rather than a speculative asset such as gold, stocks, or foreign exchange. This classification could have major implications for how crypto is taxed in the country.
Currently, the ATO treats cryptocurrency as property, subject to capital gains tax (CGT). As of June 24, its official guidance still applies CGT to various crypto-related activities, including token swaps, DeFi transactions, and wrapped assets. However, this new legal precedent could challenge that framework, potentially reclassifying Bitcoin as a form of fiat currency—and thus exempting it from CGT in certain cases.
The ruling has prompted renewed scrutiny from crypto traders and tax experts alike, as it may influence future legal interpretations and taxation policies in Australia.
How does cryptocurrency taxation work in Australia?
Under Australia’s current taxation framework, cryptocurrency is treated as an investment asset, which means it falls under the capital gains tax (CGT) system. According to the Australian Taxation Office (ATO), any transaction involving crypto—such as selling, swapping, or using it to make a purchase—is considered a CGT event.
However, earnings from activities like mining, staking, or receiving crypto as payment are classified as ordinary income. In such cases, the profit is taxed under standard income tax rules rather than capital gains.
There is an exemption for crypto assets held for personal use, provided their value is under AUD 10,000 (approximately USD 6,500). Assets exceeding that threshold, even if intended for personal use, are still subject to capital gains tax.
In a recent regulatory update, Australia introduced cash transaction limits for cryptocurrency ATMs. Operators are now required to enforce a deposit and withdrawal cap of AUD 5,000 (roughly USD 3,250). Additionally, they must clearly display warnings to inform users of potential fraud risks.
