The digital assets industry worldwide is facing challenges with regulations from major financial watchdogs. Recently, Australia’s tax office is escalating efforts to combat tax evasion related to cryptocurrencies.

According to reports, the Australian Taxation Office (ATO) is requesting personal information and transaction details from up to 1.2 million accounts across different crypto exchanges. The ATO aims to identify traders who have not reported their crypto transactions and might be avoiding tax obligations.

The complexity of the crypto industry was highlighted by the authority, recognizing that many users may not be aware of tax rules in the country. The ATO mentioned that the anonymity associated with crypto trading transactions could attract individuals attempting to avoid taxes by providing false information.

The ATO asked for personal information including date of birth, phone numbers, and social media accounts, as well as transaction details such as bank accounts, wallet addresses, and types of cryptocurrencies involved.

Australia treats digital currencies as assets for tax purposes, making investors liable for capital gains tax on profits generated from selling or trading crypto assets.

The popularity of digital assets has grown worldwide, with an increase in transactions reported in Australia in recent years. To safeguard users from crypto collapses like FTX, the government proposed regulations in 2023 that required platforms with over Aus $5 million in assets to obtain a financial services license.

Government data shows that approximately one in four Australians currently own some form of cryptocurrency. The proposed reforms aim to enhance oversight of digital asset platforms to reduce risks of collapses that could lead to financial losses for users.

If implemented, licensed digital asset platforms would need to comply with Australian financial services laws, ensuring adherence to solvency requirements, transparency standards, and measures to manage conflicts of interest. The government is seeking feedback on the proposal, with further plans for consultation on potential legislation in 2024.

The global crypto market decreased by about 2% in the last day, with a total value of $2.5 trillion and a 24-hour trading volume of approximately $86.7 billion.