Australia is known for its crypto-friendly environment, but recent legal developments may significantly change how Bitcoin is taxed in the country.
Bitcoin Reclassification
In May 2025, a significant ruling by Victorian Magistrate **Michael O’Connell** in a Bitcoin theft case suggested that **Bitcoin could be recognized as Australian currency**, not property. This statement has sparked intense debate across the crypto community and tax authorities.
**Adrian Carter**, a co-defendant in the case, stated:
> "It was held that Bitcoin is Australian money. That is, it is not a CGT asset. Therefore, acquisitions and disposals of Bitcoin have no tax consequences."
Not Yet Tax Exempt
**However, this is not the case yet.** The ruling is **under appeal** and **has not been officially regulated**. While the decision received attention, the **Australian Tax Office (ATO)** has **not updated its guidance**. Until higher courts confirm Bitcoin as legal tender, the existing tax framework remains in place.
Current Crypto Tax Regime in Australia
* Cryptos including BTC, ETH, NFTs, stablecoins, and DeFi are **classified as CGT assets**. * Subject to **Capital Gains Tax** between **0% and 40%**, based on individual income brackets. * A **50% CGT discount** applies if assets are held for over **12 months** before being sold. * The ATO tracks all crypto activity, and **non-compliance can lead to legal penalties**.
Unless Bitcoin is formally reclassified, **Australian investors and businesses must follow the existing crypto tax rules**. The ATO continues to treat digital assets as property, not money, and **capital gains tax still applies** to all crypto-related transactions.
