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Common crypto SMSF questions and how to answer them

Common crypto SMSF questions and how to answer them
By CryptoTaxCalculator
29 November 2022 — 1 minute read

With more and more Australians becoming interested in investing crypto into their SMSFs, you can bet that they’ll have a whole lot of questions for you.

Crypto and SMSFs are both complicated things on their own, let alone when combined. Let’s look at the most frequently asked questions that come up when discussing this new development.

Question #1: How would someone get started investing in cryptocurrencies for an SMSF?

First up, the individual will need to determine whether they’re setting up an individual or a corporate SMSF. Once this has been decided on, they’ll need to appoint trustees. Next, the trust and trust deed needs to be set up, allowing cryptocurrency as an investment type. It’s very important to make sure that the fund complies with SISA and SISR regulator requirements. Once the trust is set up, the fund needs to be registered and assigned an ABN. Once funds have been transferred to the SMSF’s possession, then the individual will need to decide on what crypto assets they want to invest in. Some exchanges such as Coinspot, Swyftx, and Cointree give users the ability to do the majority of this process directly on their platforms.

Question #2: Can you transfer personally owned crypto into an SMSF?

Put simply, no. If you are part of an SMSF and have your own personal crypto investments, you cannot transfer these assets into the SMSF. This is because acquisition is prohibited from a “related party” such as a member, trustee, relative of a member or trustee, or any company or unit trust that they control. Personally owned crypto falls into the definition of a related party. 

Question #3: Can any SMSF fund invest in crypto?

In order for an SMSF fund to be able to invest in crypto, it must be allowed under the SMSF’s deed. SMSF Deed, updates, and investment strategies are drafted to comply with the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act); and the Superannuation Industry (Supervision) Regulations Act 1994 (Cth) (SIS Regs).

While the incorporation of crypto into SMSFs can seem daunting, it doesn’t have to be. If you need to maintain accurate records involving crypto, software like CryptoTaxCalculator can make it much easier for you. Visit our website to find out more.

Common crypto SMSF questions and how to answer them
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