Introduction to Crypto Taxes in Australia 

What is cryptocurrency?  

Cryptocurrency is a digital or virtual asset secured by cryptography, operating on a decentralised blockchain network. Examples of common cryptocurrency assets are Bitcoin (BTC), Ethereum (ETH) and stablecoins like USDT.  

Crypto adoption in Australia 

As of 2025, Australia continues to be a global leader in cryptocurrency adoption.   

The latest data from the Independent Reserve Cryptocurrency Index (IRCI) indicates that approximately 32.5% of Australians have either owned or currently own cryptocurrency, marking a significant increase from previous years. 

This upward trend is particularly notable among younger demographics, with 32% of Gen Z Australians reportedly owning crypto, representing an 11% rise from the previous year. (Source: SwyftX) 

In response to the growing adoption of crypto, the Australian government has been working to establish clear regulatory frameworks. These efforts aim to address the tax implications and ensure consumer protection in the evolving crypto landscape. 

Regulatory environment 

Globally, the Australian Tax Office (ATO) has been a leader in crypto tax guidance, frequently issuing updates to clarify its tax treatment. In 2014, they released a guidance paper (‘Tax Treatment of Cryptocurrencies’), stating that transactions involving crypto should be treated as ‘barter arrangements,’ and using crypto to buy goods or services would generally be considered a Capital Gains Tax (CGT) event.  

A few years later, in 2017, the ATO emphasised the need for individuals to keep records of all cryptocurrency transactions, including the date of the transactions, the value in Australian dollars at the time of the transaction and the type of transaction (e.g., buy, sell, transfer, etc.). Additionally, the ATO stated that rewards earned from cryptocurrency mining are considered ordinary income and are, therefore, subject to income tax.  

More recently, in November 2023, the ATO released further guidance on more complex transactions related to DeFi, including staking, wrapping, liquidity pools, interest, lending and borrowing. This guidance indicated that the ATO was taking the stance that smart contract interactions likely trigger CGT events, meaning that many common on-chain interactions are potentially taxable and should be reported. The latest guidance meant that hundreds of thousands of Aussies potentially needed to refile previous tax years and become more diligent in maintaining records of their transactions moving forward. 

The ATO is not the only regulatory body involved in crypto regulation. AUSTRAC oversees anti-money laundering (AML) and counter-terrorism financing (CTF), while ASIC regulates crypto-related investment products and platforms.  

Does the ATO know about my crypto?  

You might be wondering how the Australian Taxation Office (ATO) knows whether you’re accurately reporting your crypto activity. The answer: The ATO has established methods for visibility over cryptocurrency activities. In 2019, the ATO launched a data-matching program designed to collect information from cryptocurrency exchanges and cross-reference it with taxpayer records. The aim was to detect any discrepancies, boost compliance and discourage tax evasion in the crypto space. 

The ATO can track transactions on centralised exchanges where you’ve completed KYC (Know Your Customer) verification, but they also have tools to monitor on-chain activity including NFTs and DeFi protocols. The ATO uses various blockchain analytics, audit trail tracking, forensic accounting and other advanced scanning techniques to review taxpayers’ cryptocurrency activity and ensure proper compliance. 

Tim Loh, Assistant Commissioner at the ATO, has said, ‘We are able to match this data to individuals transacting in crypto assets, so don’t forget to include gains and losses in your tax return. 

And they’re serious about it. In March 2020, the ATO sent letters to over 350,000 individuals who had traded crypto, reminding them to meet their obligations to report gains and losses or risk penalties. These letters have continued in the years since, part of an ongoing push to ensure accurate reporting of crypto tax obligations. 

How does the ATO view cryptocurrency today?  

As of today, the ATO classifies cryptocurrencies as property, which means it is a CGT asset for tax purposes. In other words, transactions involving cryptocurrencies may trigger capital gains tax events, requiring individuals to report and potentially pay taxes on the profits made from their crypto activities. Additionally, any crypto received from staking or mining rewards is generally classified as income for tax purposes, also requiring individuals to report and pay taxes on their activity.  

In the next section, we will explore the different CGT events, and what they mean for your taxes.