The Australian Tax Office (ATO) has requested personal data and transaction details from cryptocurrency exchanges for up to 1.2 million accounts to crack down on potential tax evaders, Reuters reported. The move represents a major escalation in the ATO's efforts to ensure compliance in the rapidly expanding cryptocurrency market.
Overseeing cryptocurrency tax compliance
The ATO notice, issued last month, aims to identify individuals who may have failed to report their cryptocurrency transactions. It focuses on cases where crypto assets have been exchanged or used for payments without proper tax filings.
The ATO acknowledged the complexities of the cryptocurrency industry, and attributed the lack of compliance to a lack of awareness about tax liabilities. In addition, the potential for anonymous transactions using false information poses a challenge in effectively enforcing tax laws.
The scope of the ATO's request extends beyond the details of the basic transaction. It includes personal information such as dates of birth, phone numbers, and social media accounts. In addition, the authority is seeking specific details such as bank accounts, wallet addresses and types of coins involved.
Australia classifies cryptocurrencies as tax assessable assets, subjecting investors to capital gains tax liabilities when selling or trading crypto assets. This approach aims to ensure fair taxation across traditional and digital asset classes.
High adoption of encryption
A recent Treasury report notes significant growth in digital asset transactions, highlighting the explosive growth of the cryptocurrency market in Australia. With more than 800,000 taxpayers participating in cryptocurrency activities in recent years, the country saw a notable 63% increase in participation in 2021.
Meanwhile, Australia is preparing to embrace exchange-traded funds (ETFs), a move that could reshape the country's investment landscape. Following in the footsteps of the United States and Hong Kong, ASX Ltd, Australia's main stock exchange, may soon allow the launch of Bitcoin exchange-traded funds, Bloomberg reports.
The growing interest in cryptocurrencies among investors is evidenced by the $53 billion inflow into US Bitcoin ETFs this year. Prominent players such as Van Eck Associates Corp. and BetaShares Holdings Pty to offer similar ETFs in Australia. This comes amid a rebound in the cryptocurrency market, which recently sent the price of Bitcoin to a record high of over $70,000.
The ASX, which is responsible for the majority of share trading in Australia, is currently evaluating applications for spot bitcoin ETFs. Although the exact timeline has not been confirmed, insiders expect that approvals could be achieved before the end of the year. The $2.3 trillion Australian superannuation market is a critical catalyst for Bitcoin ETF flows.
This article was written by Jared Kirroy at www.financemagnates.com.