Cryptocurrencies: Legal, treated as property
Cryptocurrency exchanges: Legal, must register with AUSTRAC
Cryptocurrencies and exchanges are legal in Australia, and the country has been progressive in its implementation of cryptocurrency regulations. In 2017, Australia’s government declared that cryptocurrencies were legal and specifically stated that Bitcoin (and cryptocurrencies that shared its characteristics) should be treated as property, and subject to Capital Gains Tax (CGT). Cryptocurrencies had previously been subject to a controversial double taxation under Australia’s goods and services tax (GST) – the change in tax treatment is indicative of the Australian government’s progressive approach to the crypto issue.
Cryptocurrency Exchange Regulations
In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the implementation of more robust cryptocurrency exchange regulations. The new crypto regulations require exchanges operating in Australia to register with AUSTRAC, identify and verify users, maintain records, and comply with government AML/CFT reporting obligations. Going forward, unregistered exchanges will be subject to criminal charges and financial penalties.
Future Cryptocurrency Regulations
Australia has established a pattern of proactive cryptocurrency regulation. Beyond cryptocurrency exchanges, ICOs are also being scrutinized: guidelines from the Australian Securities and Investments Commission (ASIC), issued in 2017, advise that the natural structure of the tokens (security or utility) will determine their legal treatment under general consumer law and the Corporations Act.