The regulator said it has observed a growing number of SMSF trustees reporting losses associated with crypto investments.
Natasha Panagis, head of superannuation and financial services for the Institute of Financial Professionals Australia, said in an online update that these losses have been attributed to several factors including scams, theft, collapsed crypto trading platforms, and lost passwords.
“There’s a whole range of issues going on at the moment, and there are scams involving fake crypto exchanges that have led to a number of trustees investing their super funds and have resulted in financial losses,” Panagis said.
“There are also some quite sophisticated scams going on at the moment and the ATO has noted that many crypto assets are not classified as financial products, and the platforms that are used for buying and selling crypto are often unregulated, which can leave investors unprotected in the event of platform failures or security breaches that could occur and could result in the loss of digital assets.”
Panagis said the ATO has warned trustees to seek specialist advice before investing in this asset class.
“The ATO is also recommending that before investing in any digital assets that SMSFs look at the ACCC’s ScamWatch and ASIC’s Money Smart website which has a dedicated page on SMSFs investing in crypto assets,” she said.
Panagis said the ATO has also stated that it is going to acquire data from crypto-designated service providers for the 2023–24 financial year, up until the 2026 financial year, and is planning to match it against its systems to identify and treat clients who fail to report disposal of crypto assets in their income tax return.
“Just beware for clients that might have an SMSF, or even own crypto personally, if they are using their entities to invest in crypto, the ATO is on the lookout and is going to be data matching between those crypto data platforms and their own platforms,” Panagis said.
In April the ATO released guidance on this program and estimated that records relating to approximately 700,000 to 1,200,000 individuals and entities will be obtained each financial year.
Up until the 2025–26 financial year, it said it would acquire account identification and transaction data from crypto-designated service providers including client identification details (names, addresses, date of birth, phone numbers, social media accounts and email addresses), and transaction details (bank account details, wallet addresses, transaction dates, transaction time, transaction type, deposits, withdrawals, transaction quantities and coin type).
The data will be acquired and matched to ATO systems to identify and treat clients who failed to report the disposal of crypto assets in their income tax returns.
