Australian Court Ruling Challenges How Crypto Is Taxed
A recent court decision in Australia has stirred up debate over how cryptocurrencies should be classified—and taxed. In a case involving a federal police officer accused of stealing 81.6 Bitcoin back in 2019, Judge Michael O’Connell ruled that Bitcoin should be treated as *money*, not just an asset. That goes directly against the Australian Taxation Office’s (ATO) current stance, which treats crypto more like property.
The ruling, handed down on May 19, suggests Bitcoin functions more like traditional currency—say, the Australian dollar—rather than something you’d lump in with gold, stocks, or foreign exchange. But here’s the thing: the ATO’s website, as of June 24, still categorizes crypto under capital gains tax rules. So, what happens now?
How Crypto Is Taxed Right Now—And What Could Change
At the moment, the ATO treats crypto as an investment, meaning every time you sell, swap, or even spend it, that’s considered a taxable event under capital gains rules. Mining or staking rewards? Those count as ordinary income instead. There’s a small exception—if you’re using crypto for personal purchases under AUD 10,000 (about $6,500), the ATO lets it slide. But anything above that, and you’re on the hook.
Now, if this court ruling holds, things could get messy. If Bitcoin is legally recognized as money, does that mean swapping it shouldn’t trigger capital gains? Would it be treated more like exchanging dollars for euros? Nobody’s sure yet, but traders and tax experts are watching closely.
Why This Matters Beyond Taxes
This isn’t just about paperwork. The ruling could ripple into other areas, like how crypto is regulated in everyday transactions. Australia’s already tightening rules around crypto ATMs, cashing deposits and withdrawals at AUD 5,000 ($3,250) per transaction and slapping fraud warnings on machines. If crypto gets classified as money, will those rules shift too?
For now, the ATO hasn’t publicly reacted to the court’s decision. Their website still lists crypto under capital gains, no updates. But with more traders questioning the rules, this might not hold forever.
One thing’s clear—Australia’s approach to crypto is still figuring itself out. And depending on how this plays out, taxpayers might end up with a very different set of rules to follow. Or maybe not. Courts and tax offices don’t always move in sync.
Either way, if you’re dealing with crypto in Australia, it’s probably worth keeping an eye on this. Just in case.
