These two things are changing the world. Where Blockchain is changing the way of business across the globe, Cryptocurrency is also shaping the financial industry.
We all are witnessing the rapid growth of Cryptocurrency usage. In fact, a lot of giant organizations and institutions are also adopting not only Blockchain technology but also Crypto offerings.
Several countries issue updated laws and regulations in favour of Crypto assets.
El Salvador is the perfect example of that. It is the first-ever country to consider Bitcoin as its official currency, just like the traditional fiat currencies. This has changed Crypto trading not only in the country but also in the whole world.
More and more people are now investing in the Crypto market using the best and most trustable Crypto trading platforms, such as bitcoin smarter.
The first thing you should do is get an idea about the rules and regulations of Bitcoin in your country. When you are in Australia and want to try the Crypto market, it is crucial to understand the Cryptocurrency Laws in Australia.
Australia Cryptocurrency Laws
It was 2019 30th of May, and the ASIC, or Australian Securities and Investment Commission, published updated guidance for ICOs (initial coin offerings) and Crypto trading. As per the guidance, by their nature ICOs seek to raise capital from the public in order to fund a specific project through the issue of all types of Crypto-assets, like Crypto tokens.
In case the Crypto-asset is being issued by the ICO as a financial product, like with interest in a managed investment scheme or security. At the same time, the issuer of ICO also has to comply with capital raising provisions of the Corporation Act that are totally relevant, along with AFS licensing requirements and a lot of other regulatory requirements.
The rights of Crypto-assets are issued under an ICO as per Australian law. It is crucial for assessing its legal status as a financial product. All these rights are typically described in the ‘white paper’ of the ICO.
Now, if you are thinking about what a white paper is, let us give you a clear idea about that.
The white paper is a document that is issued by the business that is making the particular offer or sale of an ICO crypto-asset. From different circumstances, the rights also can be different.
Australian Law’s Managed Investment Scheme
As per Australian law, some particular ICOs might constitute a managed investment scheme. It is basically a firm of collective investment vehicles. The Corporations Act defines this and has 3 elements.
- Individuals contribute traditional money or assets like any type of Crypto assets in order to obtain an interest in the scheme that is completely subject to limited exceptions that are also regulated by the Corporations Act.
- Anyone among the contributions is used or pooled in a common enterprise for generating financial benefits or attractive interests in property. It is done wholly for purposes that involve generating a financial benefit for contributors.
- The contributors don’t have any type of day-to-day control over the operations of the scheme. However, often they might have voting rights or some kind of similar rights.
Also, when an ICO is being created in order to find any company or any undertaking that also looks like a company, all the rights which are attached to the particular issued Crypto asset might fall within the definition of a security.
It means it will include a share of the option of acquiring a share in the upcoming days.
More On Australian Cryptocurrency
After completing an inquiry into how to build an effective regulatory system for digital currency, the Senate Economic References Committee of the Australian Parliament published a report in August 2015.
It was named “Digital Currency — Game Changer or Bit Player.”
In May 2016, The Australian government responded to the recommendations of the Committee. They consider some responses regarding the Cryptocurrency tax treatment, and all the noted aspects are controlled and managed by the ATO or Australian Taxation Office, obviously.
On the tax treatment of any type of virtual currency, the ATO has published a complete guidance document. As per that guidance, any type of Cryptocurrency transaction is considered as skin to a barter arrangement, and it comes with similar tax consequences.
It is because Cryptocurrencies are neither the usual form of money nor a foreign currency in the eyes of ATO. Also, the individuals who are using Cryptocurrencies need to keep a record of the transactions, such as the date and the amount in Australian dollars, the purpose of the transaction, and the details of the other party.
Understanding the laws is not a matter of joke. We hope the above information will help you in understanding the Australian laws regarding Cryptocurrency. Still, if you have any queries or doubts, feel free to contact us.