In late , Australian Federal Treasurer Josh Frydenberg announced plans for sweeping payment reforms that would have consequences for the cryptocurrency industry. The plans include a new, dedicated licensing framework for Australia cryptocurrency exchanges that will enhance regulatory protection for the purchase and sale of crypto assets.
The regulations will also be extended to businesses that hold crypto assets on behalf of customers. In addition to the Australia cryptocurrency licensing regime, the Treasury announced a consultation on possibilities for an Australian central bank digital currency CBDC. Australia cryptocurrency regulations typically demonstrate a fast moving approach.
In addition to the development of a dedicated licensing regime, in Australia is aiming to receive a new framework for the taxation of digital assets, map the risk landscape of existing cryptocurrencies, examine the potential incorporation of Decentralized Autonomous Organization DAOs into Australian financial regulation, and receive a joint report from the Treasury and the RBA on the feasibility of the proposed CBDC.
Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information. Request Demo Login. Download now. This was especially visible in the Chinese province of Zhejiang - one of three provinces the sources used to represent China.
The source states that the figures shown here should "collectively represent approximately 37 percent of Bitcoin total hashrate over the examined period. Unique cryptocurrency wallets created on Blockchain. As a Premium user you get access to the detailed source references and background information about this statistic.
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Premium statistics. Read more. Most Bitcoin mining occurred in the United States, according to IP addresses from so-called hashers that used certain Bitcoin mining pools in Likely this is connected to energy prices worldwide : Electricity costs in Germany were over 10 times more expensive than in, for example, China - the country that for a long time was the largest crypto miner until late Bitcoin requires energy for hashing, or the PC processing power needed to build the blockchain.
Simply put, the more hashing occurs, the more Bitcoin is being mined. These figures attempt to show where most of this hashing - and, consequently, Bitcoin mining - occurs. Note that mining figures are different from figures on Bitcoin trading: Africa and Latin America were more interested in buying and selling BTC than some of the world's developed economies. How much Bitcoin is mined in every country per day? There are figures for the current and maximum supply of Bitcoin , but these do not include the location where the currency was mined.
The closest figure would be to look at the hashrate from so-called mining pools — places where miners can dig for Bitcoin — and how much they hashed in the last 24 hours. In , the world's top Bitcoin mining pools all came from China, with five pools being responsible for over half of the cryptocurrency's total hash.
Can Bitcoin mining be profitable? Bitcoin mining could lead to profits for some, but there are several things to consider. Mainly, the maximum supply of Bitcoin is getting closer, so the algorithm requires more and more processing power. This is reflected in the steady growth of BTC mining difficulty — a metric that looks at how much effort miners are putting in to get a Bitcoin.
Indeed, mining firms bought so much hardware capable of mining that prices of these mining rigs grew by roughly 10 percent each week in as supplies worldwide had sold out. Full access to 1m statistics Incl. Single Account. This product cannot be purchased for users from your country.
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There has been a proliferation of product offerings from the Australian blockchain and cryptocurrency community, and the Australian approach to the sector has broadly remained supportive of new and innovative financial services and products using or transacting cryptocurrencies. In part, the expansion of the sector in Australia has been led by businesses in the payments, crypto asset, lending, investment and custodial services spaces. To date, the Government has taken a largely non-interventionist approach to the regulation of cryptocurrency, allowing the landscape to evolve at a faster rate without significant regulatory limitation.
Such growth remains a priority for the Government, emphasised by its Select Committee on Australia as a Technology and Financial Centre publishing its third issues paper in March , having amended its scope of matters to include opportunities and risks in the digital asset and cryptocurrency sector. Although the RBA has been involved in numerous projects to explore the potential use and implications of a wholesale central bank digital currency CBDC , it maintains that there is currently no public policy case to issue a retail CBDC.
While the Government has not significantly intervened in cryptocurrencies and related activities, there has been general clarification of the application of Australian regulatory regimes to the sector. As well as in payments, there has been a growing expectation that crypto assets including cryptocurrencies will become accepted as an investment asset class.
While there have been legislative amendments to accommodate the use of cryptocurrencies, these have predominantly focused on the transactional relationships e. ASIC has reaffirmed the view that legislative obligations and regulatory requirements are technology-neutral and apply irrespective of the mode of technology that is being used to provide a regulated service.
This depends on how they are structured and the rights attached, which ultimately determines the regulations with which an entity must comply. For example:. ASIC has recently launched a consultation process on its proposals to clarify expectations for crypto assets that form part of the underlying assets of ETPs and other investment products. ASIC proposes to set expectations for market operators, retail fund operators i.
This primarily centres around criteria that ASIC expects market operators to apply when determining whether a specific crypto asset is an appropriate asset for market-traded products. This broadly requires institutional support of the crypto asset, service providers willing to support the use of the crypto asset, maturity of the spot market for the crypto asset, regulation of derivatives linked to the crypto asset, and the availability of robust and transparent pricing mechanisms for the crypto asset.
ASIC proposes to include crypto assets as a distinct asset class on AFSL authorisations for managed investment schemes, but expects that this will only authorise the holding of Bitcoin and Ether in the short term. The consultation process remains open at the time of writing and it is expected that industry feedback will inform how ASIC intends to apply the proposals in the future.
There are currently no specific regulations dealing with blockchain or other distributed ledger technology DLT in Australia. However, ASIC maintains a public information sheet INFO Evaluating distributed ledger technology most recently updated in March outlining its approach to the regulatory issues that may arise through the implementation of blockchain technology and DLT solutions more generally.
Businesses considering operating market infrastructure, or providing financial or consumer credit services using DLT, will still be subject to the compliance requirements that currently exist under the applicable licensing regime. There is a general obligation that entities relying on technology in connection with the provision of a regulated service must have the necessary organisational competence and adequate technological resources and risk management plans in place.
While the existing regulatory framework is sufficient to accommodate current implementations of DLT, as the technology matures, additional regulatory considerations will arise. The ETA provides a legal framework to enable electronic commerce to operate in the same way as paper-based transactions.
Under the ETA, self-executing contracts are permitted in Australia, provided they meet all the traditional elements of a legal contract. Core considerations for issuers are outlined below. Of particular concern to those dealing with cryptocurrencies is whether the relevant cryptocurrency constitutes a financial product triggering financial services licensing and disclosure requirements.
ASIC indicated that what is a right should be interpreted broadly. Depending on the circumstances, coins or tokens may constitute interests in managed investment schemes collective investment vehicles , securities, derivatives, or fall into a category of more generally defined financial products, all of which are subject to the Australian financial services regulatory regime.
In INFO , ASIC provided high-level regulatory signposts for crypto asset participants to determine whether they have legal and regulatory obligations. These signposts are relevant to crypto asset issuers, crypto asset intermediaries, miners and transaction processors, crypto asset exchanges and trading platforms, crypto asset payment and merchant service providers, wallet providers and custody service providers, and consumers.
Broadly, entities offering coins or tokens that can be classified as financial products will need to comply with the regulatory requirements under the Corporations Act, which generally include disclosure, registration, licensing and conduct obligations. An entity that facilitates payments by cryptocurrencies may also be required to hold an AFSL and the operator of a cryptocurrency exchange may be required to hold an Australian market licence if the coins or tokens traded on the exchange constitute financial products.
This reflects its willingness to build greater investor confidence around cryptocurrency as an asset class. However, ASIC has emphasised consumer protection and compliance with the relevant laws and has taken action as a result to stop proposed token sales targeting retail investors due to issues with disclosure and promotional materials the requirements of which are discussed below as well as offerings of financial products without an AFSL.
In , the Treasury consulted on ICOs and the relevant regulatory frameworks in Australia; however, no outcomes of this consultation have been reported to date. For example, an offer of a financial product to a retail client with some exceptions must be accompanied by a regulated disclosure document e. In some instances, the marketing activity itself may cause the token sale to be an offer of a regulated financial product. At the time of writing, no outcomes have been released in relation to either of these consultations.
Foreign companies taken to be carrying on a business in Australia, including by issuing cryptocurrency or operating a platform developed using ICO proceeds, may be required to either establish a local presence i. Generally, a company holding an AFSL will be carrying on a business in Australia and will trigger the requirement. Promoters should also be aware that if they wish to market their cryptocurrency to Australian residents, and the coins or tokens are considered a financial product under the Corporations Act, they will not be permitted to market the products unless the requisite licensing and disclosure requirements are met.
Generally, a service provider from outside of Australia may respond to requests for information and issue products to an Australian resident if the resident makes the first unsolicited approach and there has been no conduct on the part of the issuer designed to induce the investor to make contact, or activities that could be misconstrued as the provider inducing the investor to make contact.
From 5 October , issuers and distributors of financial products must comply with design and distribution obligations DDO , which may impact the way cryptocurrencies are structured and token sales are conducted in the future. Issuers and distributors must implement effective product governance arrangements, which include among other things a target market determination subject to review triggers.
The DDO aim to ensure that financial products are targeted at the correct category of potential investors. Issuers and distributors are required to comply with the DDO from 5 October These powers are highly likely to impact marketing and distribution practices in the cryptocurrency sector where cryptocurrencies fall within the remit of the powers.
Even if a token sale is not regulated under the Corporations Act, it may still be subject to other regulation and laws, including the Australian Consumer Law set out at Schedule 2 to the Competition and Consumer Act Cth ACL relating to the offer of services or products to Australian consumers. The ACL prohibits misleading or deceptive conduct in a range of circumstances, including in the context of marketing and advertising. As such, care must be taken in token sale promotional material to ensure that buyers are not misled or deceived and that the promotional material does not contain false information.
In addition, promoters and sellers are prohibited from engaging in unconscionable conduct and must ensure that the coins or tokens issued are fit for their intended purpose. The protections of the ACL are generally reflected in the ASIC Act, providing substantially similar protection to investors in financial products or services.
ASIC has also received delegated powers from the Australian Competition and Consumer Commission to enable it to take action against misleading or deceptive conduct in marketing or issuing token sales regardless of whether it involves a financial product.
ASIC has indicated that misleading or deceptive conduct in relation to token sales may include:. ASIC has stated that it will use this power to issue further inquiries into token issuers and their advisers to identify potentially unlicensed and misleading conduct. A range of consequences may apply for failing to comply with the ACL or the ASIC Act, including monetary penalties, injunctions, compensatory damages and costs orders.
The taxation of cryptocurrency in Australia has been an area of much debate, despite recent attempts by the Australian Taxation Office ATO to clarify the operation of the tax law. For income tax purposes, the ATO views cryptocurrency as an asset that is held or traded rather than as money or a foreign currency. The tax implications for holders of cryptocurrency depend on the purpose for which the cryptocurrency is acquired or held.
The summary below applies to holders who are Australian residents for tax purposes. If a holder of cryptocurrency is carrying on a business that involves sale or exchange of the cryptocurrency in the ordinary course of that business, the cryptocurrency will be held as trading stock. Examples of relevant businesses include cryptocurrency trading and cryptocurrency mining businesses.
Generally but not exclusively , where the activities are undertaken for a profit-making purpose, are repetitious, involve ongoing effort, and include business documentation, the activities would amount to the carrying on of a business. If cryptocurrency is not acquired or held in the course of carrying on a business, or as part of an isolated transaction with a profit-making intention, a profit on sale or disposal should be treated as a capital gain.
Capital gains may be discounted under the CGT discount provisions, so long as the taxpayer satisfies the conditions for the discount that is, the cryptocurrency is held for at least 12 months before it is disposed of. Capital losses made on cryptocurrencies that are personal use assets are also disregarded.
Cryptocurrency will be a personal use asset if it was acquired and used within a short period of time for personal use or consumption that is, to buy goods or services. An entity may hold units of cryptocurrency i. The value of such tokens should be treated as ordinary income of the recipient at the time they are derived. However, if the issued coins are characterised as equity for tax purposes or are issued in respect of a borrowing of money, the ICO proceeds may not be assessable to the issuer.
Supplies and acquisitions of digital currency made from 1 July are not subject to GST on the basis that they will be input-taxed financial supplies. Consequently, suppliers of digital currency will not be required to charge GST on these supplies, and a purchaser would prima facie not be entitled to GST refunds i.
On the basis that digital currency is a method of payment, as an alternative to money, the normal GST rules apply to the payment or receipt of digital currency for goods and services. A miner will carry on an enterprise where it conducts an activity, or a series of activities, in the form of business or in the form of an adventure or concern in the nature of trade, but it does not include activities conducted for a private recreational pursuit, as a hobby or as an employee.
However, a miner who does not satisfy this GST registration threshold may nevertheless elect to register for GST in order to claim from the ATO full input tax credits i. The ATO has created a specialist task force to tackle cryptocurrency tax evasion.
The ATO also collects bulk records from Australian cryptocurrency designated service providers to conduct data matching to ensure that cryptocurrency users are paying the right amount of tax. With the broader regulatory trend around the globe moving from guidance to enforcement, it is likely that the ATO will also begin enforcing tax liabilities more aggressively. Broadly, registered exchanges will be required to implement know-your-customer processes to adequately verify the identity of their customers, with ongoing reporting obligations such as annual compliance reporting and the requirement to monitor and report suspicious and large transactions.
To keep it simple, let's say the price of ETH hasn't changed since you bought it. This is your disposal - you need to report this to the ATO as a disposal, regardless of the fact you have no capital gain or loss. Of course, doing this for every transaction can be time-consuming. Koinly can help you do this with our "treat transfer fees as disposals" setting. If you're adding or removing liquidity from various DeFi protocols, on the surface, this doesn't look like a taxable event.
You're not disposing of your crypto and these transactions are more akin to a transfer. However , if you receive a token in exchange for your share in the liquidity pool, this could be viewed as a crypto-to-crypto swap and subject to Capital Gains Tax. Each DeFi protocol works slightly differently - your best bet here is to speak to an experienced crypto accountant to ensure you remain tax compliant.
Airdrops and forks are the windfalls of the cryptocurrency world, but will you need to pay tax on new assets from drops and chain splits? Will it be classed and taxed as some sort of income? Or are airdrops and forks tax free? The ATO has stated that any airdrops received are considered ordinary income at the fair market value of the tokens on the date you received them.
Airdrops are akin to bonuses. To figure out how much Income Tax you need to pay, calculate the fair market value of your airdropped crypto on the day you receive it and apply your income tax rate. Your tokens are subject to Income Tax, so you need to calculate their total worth. If you sell, swap, spend or gift your airdropped coins or tokens, the disposal is treated as a normal capital gains event.
You sell your airdropped 1INCH tokens a couple of days after. You can use the calculation above as your cost basis. The cost basis for new coins from a hard fork is zero. The ATO offers more detail on fork scenarios here. One of the ways you can reduce this taxation is to HODL. This discount would apply to coins received from a fork, just as it would to any other crypto asset held for more than a year.
When a cryptocurrency changes its underlying tech for ex. Note that if your old coins continue to hold value even after the new ones have been issued then the ATO may consider this as a fork and not a swap - this may give rise to a Capital Gains Tax event.
Gifts and donations are tools often used in tax minimisation, but will it work for crypto tax in Australia? Here's what the ATO has to say about how crypto donations and gifts are taxed. This is going to hurt. Whether your reason for gifting your crypto is altruistic or opportunistic, the ATO cares not and will happily ask you to pay Capital Gains Tax on the disposal.
If someone gives you crypto as a gift, consider yourself lucky for two reasons. You've just scored some crypto and you don't pay any tax. Receiving crypto as a gift is not a taxable event. But, you will need to keep a record of the fair market value of the crypto on the day you received it. This will become your cost basis and you'll need this to calculate a potential gain or loss, should you decide to sell, or even re-gift your crypto gift. The bad news is back.
While the receiving of a crypto gift is tax free, the disposal - be it by selling, swapping, spending, or re-gifting, is taxed as Capital Gains Tax. In Australia crypto donations work the same as regular donations - they're tax deductible if you're donating to a registered charity. Mining bitcoin in Australia? The ATO will tax your mining activities based on whether you're a hobby miner, or a trader. The lines can get blurry - In order to determine whether you are mining crypto as a business, check out this section of ATO's website.
A hobby miner is someone who participates in cryptocurrency mining as an interest or pastime and not in a business-like manner seeking commercial profits. Their investment in mining tech will be relatively insignificant - a small scale operation at home - and intention to accumulate the rewarded coins rather than sell immediately to turn a profit. The mined coins will be subject to capital gains tax on disposal. No expense deductions are allowable. It's also important to remember that personal use asset exemption rules don't apply to the capital gains made on disposal of mined cryptocurrency.
A person conducting their mining in a large scale business operation is a commercial miner. You may also be in the business of mining rather than accumulating the rewarded coins, you continually sell for an immediate profit. In order to determine whether you are mining crypto as a business, or at a hobby-level , check out this section of ATO's website.
When you eventually sell your mined coins, you will still be subject to capital gains tax on the difference between the value you declared as Income and the value at the time of the sale. The tax for crypto trading such as margin trading, futures and other CFDs is a little complicated, so let's break down the taxes on crypto trading. Margin trading with crypto involves borrowing funds from an exchange to carry out your trades and then repaying the loan later. There is usually an interest payment involved as well.
The ATO does not currently provide any clear guidance on what taxes apply to cryptocurrency margin trading, futures, options, or other types of derivatives. If you are an investor, a common conservative approach is to record any gains or losses from these trades as capital gains or losses as you would with spot trades. In this case, CGT will apply. On a margin trade you are borrowing funds to carry out some trades.
Most exchanges have different platforms for both, for ex. Binance allows margin trading on spot markets, whereas you have to trade on a completely different platform if you want to do futures as well - Binance Futures. Taking this into consideration, the conservative approach is to simply treat borrowed funds as your own investments and pay CGT on the repayment of the loan if the loan interest is charged in cryptocurrency since this would be deemed a disposal.
In futures trading, you are not actually buying or selling any crypto. Instead you are speculating on the rise or fall of the price of a crypto asset in the future. DeFi is still pretty new and it's constantly evolving, offering investors new opportunities to make money. All this to say, the IRS hasn't yet issued clear guidance on specific DeFi transactions and how they're seen from a tax perspective.
Don't jump for joy just yet. That doesn't mean you won't pay any taxes on your DeFi transactions. Instead, investors need to look at the current guidance on crypto transactions and infer the likely tax on their DeFi transactions. At a basic level, the tax you'll pay depends on whether you're seen to be 'earning' crypto or 'disposing' of crypto.
Remember, earning crypto is anytime you're receiving new coins or tokens as a result of your transactions. This would cover many DeFi transactions. Meanwhile, when you're swapping, selling or spending tokens on DeFi platforms - this would be subject to Capital Gains Tax. In summary, we can infer that the tax treatment of DeFi would likely break down into the following tax treatments:. We recommend speaking with an experienced crypto accountant for clear guidance on DeFi tax to remain compliant.
Anytime you're seen to be 'earning' from DeFi - whether that's new coins or tokens - it's likely that the ATO will view this as additional income and you'll pay Income Tax based on the fair market value of the asset in AUD on the day you received it. Anytime you sell or swap a coin or token on a DeFi protocol, this is likely to be viewed as a disposal from a tax perspective, making it subject to Capital Gains Tax.
You'll pay tax on any profits as a result of a disposal. This purchase usually happens via an existing cryptocurrency likes Bitcoin or Ethereum. From the ATO's perspective, this amounts to a crypto-to-crypto trade. The taxable event is triggered on the date of the ICO transaction, when you receive the new tokens.
Any crypto you get in return for signing up or referring users to a service is taxed as Income. Referral bonuses are akin to the concept of commission. Whether you are freelancing or working for a company that pays employees in crypto, you can't escape income tax.
Any coins received as income are taxed at market value at the time you received them so make sure you declare this income on your annual tax return or you might end up facing the taxhammer. The Personal Use Asset rule can apply to crypto but under very strict conditions.
According to the ATO, the longer you hold a cryptocurrency, the less likely it is to be a personal use asset. Jasmine has been regularly keeping cryptocurrency for over six months with the intention of selling at a favourable exchange rate. She has decided to buy pay for new furniture with some of her cryptocurrency. Because Jasmine used the cryptocurrency as an investment initially, the cryptocurrency - and its disposal - is not a personal use asset. While most assets attract capital gains tax in Australia, goods bought for personal use, such as clothes, are classed as personal use assets.
Personal use assets do not attract capital gains tax. So, how does this personal use asset exemption apply to purchases paid for in crypto? Ordinarily, when you pay with crypto, this is seems as a 'disposal' - and that equals capital gains tax. However, capital gains tax may not apply to goods paid for in crypto when:. The item bought is for personal use not for business, nor as an investment.
Clothes, airline tickets, sporting equipment. Steve needs a new hoodie. His favourite store offers discounted prices for payments made in cryptocurrency. Under the circumstances in which Steve acquired and used the crypto, the cryptocurrency is a personal use asset, and thus does not attract capital gains tax. If you are a trader and you hold crypto for sale or exchange in the ordinary course of your business the trading stock rules apply , and not the CGT rules.
This means the crypto you buy and sell is viewed as stock - as in, stock take. Profit from the sale of cryptocurrency held as trading stock in a business is ordinary income. The cost of acquiring cryptocurrency held as trading stock is deductible as a business tax deduction. Examples of businesses that involve cryptocurrency include cryptocurrency trading businesses, cryptocurrency mining businesses, cryptocurrency exchange businesses including ATMs.
Jake runs a crypto trading business. The ATO wants to know about your crypto activity in terms of income and capital gains. You'll need to declare both in your Annual Tax Return , in the same way you need to report your regular income, gains and losses. Don't get stuck in the busywork. Don't get it wrong. Don't rely on your accountant to know where to look.
Use Koinly to generate crypto tax reports. Here's how easy it is:. The Australian tax year runs from July 1 - June 30 the following year. If you are lodging your own tax return for July 1, — June 30, , it needs to be filed by October 31, Lodging through an accountant? You have until March 31 to file. Trader's work under income tax for business rules, not capital gains.
This means your cryptocurrency is your trading stock, and you need to follow the rules for valuing trading stock. Once you, or your accountant have calculated your crypto tax totals we have an app for that! Start from your myTax account, available from your myGov dashboard. You also have the option of declaring your crypto activity on paper and returning the forms by mail. You'll need 2 forms, one for income, and one for capital gains.
Crypto income is declared on question 2 of Tax return for individuals NAT Next, complete question 18 of the Individual tax return instructions supplement Tax return for individuals supplementary section NAT Yes, you do! If you've made income from crypto as an investor so not as a business and then sell your newly gained crypto, there are 2 taxable events at play. First, income tax is paid on the coins you received. Then capital gains tax is paid on the profit or loss when you sell, or 'dispose' of these coins.
To calculate the crypto taxes for Jed we are going to use Koinly which is a free online crypto tax calculator. Navigating to the Tax Reports page also shows us the total capital gains. The good thing about crypto tax software is that whether you have 10 transactions or 10, - it is equally easy to generate your tax reports! You can sign up for a free Koinly account and view your capital gains in a matter of minutes.
Crypto tax reporting is fairly new, and a road less travelled for most accountants. That doesn't mean the ATO is going to cut you any slack. Here are 3 ways you can tackle your crypto taxes and keep in the taxman's good books. We'll start with the easiest and most accurate method first. For tips on what to look for in a crypto accountant, follow our 5 step screening process. Ready to share your crypto journey with the ATO? Whether you're filing yourself via myTax or printed forms, or handing the job over to your accountant, you'll need to start by downloading your crypto activity summary from Koinly.
While the task of preparing your crypto taxes can seem quite daunting - especially if you traded on multiple exchanges - there are tools like Koinly which can make your life really easy. Here's how it works:. Most exchanges have API's that can allow Koinly to download your transaction history automatically. You can also import CSV or excel files with your transaction history if you prefer that or if your exchange does not have an API.
Once imported you'll have a clear overview of your trades and can use Koinly as a portfolio tracker. Your base currency should be AUD. Select the date range you need to file for. The Australian tax year runs from July 01 to June 31 of the following year. Koinly does a number of things under the hood in order to calculate your capital gains and income.
First it fetches the market rates at the time of your trades, then it matches transfers between your wallets and exchange accounts and finally it calculates your capital gains. Koinly offers many downloadable tax reports. Your report will download as a PDF and will contain sample report here. The first step towards minimising your tax liability is figuring out what losses and expenses you can offset against your taxable income.