You can see the rules and regulations in other jurisdictions.
Cryptocurrencies are currently not regulated specifically, but ASIC's regulatory guidance informs businesses of the legal status of coins and tokens offered here. The legal status of these coins depends on their structure and any attached rights. They may be categorized as managed investment schemes, securities, derivatives, NCP facilities or fall into a more general financial product category. The operator and promoter of a coin must comply with financial services regulatory requirements under the Corporations Act if the coin is a financial product. Consumer protection provisions also apply to cryptocurrencies, prohibiting false or misleading representations and unconscionable behavior.1
Providers of digital currency exchanges (DCEs) must enrol and register with AUSTRAC under the AML/CTF Act, and apply AML/CTF processes to DCE services (e.g., customer identification, transaction monitoring).1
According to the Australian Taxation Office (ATO), cryptocurrencies are neither money nor foreign currencies for income tax purposes. A cryptocurrency's tax implications depend on the purpose for which it was acquired or held. The cryptocurrency will be held as trading stock if the holder is carrying on a business involving the sale or exchange of cryptocurrencies. Cryptocurrency gains will be assessed and losses will be deductible (subject to integrity measures and 'non-commercial loss' rules). A cryptocurrency holder can still assess profits or gains if they entered into an 'isolated transaction' involving the sale or disposal of cryptocurrency with the intention of making a profit, and the transaction was part of a business operation or commercial transaction even if they did not invest or acquire it in the ordinary course of conducting business. A profit on sale or disposal of cryptocurrency should be treated as a capital gain if it was not acquired or held for the purpose of carrying on a business, or as part of an isolated transaction intended for profit-making. Cryptocurrency is a capital gains tax (CGT) asset, according to the ATO, and a CGT event occurs when a cryptocurrency is sold or disposed of. Among the CGT events are the sale of cryptocurrency for fiat currency, the exchange of one cryptocurrency for another, the gifting or trading of cryptocurrency, and the use of cryptocurrency to purchase goods or services. The capital gain on the disposal of a cryptocurrency may be reduced by a CGT discount if the cryptocurrency is held as an investment for at least 12 months. Additionally, certain capital gains or losses may be disregarded when a cryptocurrency is disposed of that is a personal use asset (i.e., an asset used mostly to purchase personal items).1
A coin issuance by an Australian tax resident or acting through an Australian permanent establishment may be assessable in Australia as an ICO. If the issued coins are treated as equity or issued in connection with a borrowing of money, the ICO proceeds may not be taxable. As cryptocurrency technology and its applications evolve rapidly, the ATO's views on the income tax implications of transactions involving cryptocurrencies are in flux.1
As a result of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), GST is not payable on the sale, including ICOs, or purchase of cryptocurrencies (namely those that fulfill the requirements for 'digital currencies' under the act, such as Bitcoin, Ethereum, Litecoin, Dash, Monero, ZCash, Ripple and YbCoin). Generally, however, GST-registered entities are restricted from claiming input tax credits for the GST component of cryptocurrency-related costs (with certain exceptions). When a non-resident acquires cryptocurrency for its overseas business, no GST will be payable. However, when businesses supply goods or services and receive cryptocurrency as payment in return, they must abide by the standard GST rules. That means these businesses need to report and send one-eleventh of the total amount towards tax to the ATO, calculated in Australian currency. Just like with money, there are GST implications when using cryptocurrency as payment.1
