May 21, 2025 • 9 mins
A recent court ruling in Victoria, Australia, could fundamentally change how Bitcoin—and potentially other cryptocurrencies—are taxed in the country. In a landmark decision during a criminal case involving a former AFP officer who stole 81.6 BTC, the magistrate ruled that Bitcoin should be treated as "cash" rather than property or an asset like shares or gold.
If upheld through appeals, this single classification change would dismantle the current ATO framework that has applied Capital Gains Tax (CGT) to crypto disposals since 2014. Under current ATO rules, selling, gifting, trading, or using cryptocurrency to purchase goods all count as CGT events. But if Bitcoin is legally deemed as cash, these transactions would no longer incur capital gains tax. The decision opens up the possibility of tax refunds dating back to 2019—estimated to total as much as $1 billion. It could also dramatically simplify crypto reporting requirements in Australia. The judgment is based on the idea that exchanging Bitcoin is no different from swapping physical cash (like trading a $20 note for two $10s), which is a non-taxable event.
If upheld, this case sets a legal precedent with the potential to influence not just Australian law but other countries that share similar common law traditions. The episode breaks down key details from the court proceedings, reactions from the tax community (highlighting commentary from @taxinvestaccounting on Instagram), and what this might mean for crypto users and investors in Australia. It’s a space to watch closely, as the ATO is expected to appeal the ruling. If it eventually reaches the High Court of Australia, the outcome could reshape the future of crypto taxation across the country.
If upheld through appeals, this single classification change would dismantle the current ATO framework that has applied Capital Gains Tax (CGT) to crypto disposals since 2014. Under current ATO rules, selling, gifting, trading, or using cryptocurrency to purchase goods all count as CGT events. But if Bitcoin is legally deemed as cash, these transactions would no longer incur capital gains tax. The decision opens up the possibility of tax refunds dating back to 2019—estimated to total as much as $1 billion. It could also dramatically simplify crypto reporting requirements in Australia. The judgment is based on the idea that exchanging Bitcoin is no different from swapping physical cash (like trading a $20 note for two $10s), which is a non-taxable event.
If upheld, this case sets a legal precedent with the potential to influence not just Australian law but other countries that share similar common law traditions. The episode breaks down key details from the court proceedings, reactions from the tax community (highlighting commentary from @taxinvestaccounting on Instagram), and what this might mean for crypto users and investors in Australia. It’s a space to watch closely, as the ATO is expected to appeal the ruling. If it eventually reaches the High Court of Australia, the outcome could reshape the future of crypto taxation across the country.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Could your bitcoin profits be tax free? And this is
a big landmark case in Australia at the moment where
the judge has ruled that bitcoin is to be treated
as cash as opposed to an asset or property. This
completely flips on its head how the Australian tax offers
has been treating bitcoin and cryptocurrencies at the moment. That
(00:20):
could mean that we won't be paying capital gains tax
in the future. And also, since this case was back
in twenty nineteen, they would have to repay anyone that
has paid capital gains tax since twenty nineteen. This is big.
Let's get into the details here everyone. I'm Peter Bury.
If it's the first time here a hit that thumbs
up like subscribing notification belt. I talk everything about Kadano
(00:42):
and cryptocurrency here and we'll be covering this case in
more detail. But let's get into the details here. I
think this video here from the Tax invest Accounting Instagram
page says it really well. So let me just play
this clip for you guys.
Speaker 2 (00:56):
A landmark ruling in a Victorian magistrate court lead to
the ATO paying out one billion dollars to taxpayers who
have held bitcoins since twenty nineteen.
Speaker 3 (01:07):
Let's talk about this.
Speaker 2 (01:08):
So there was a recent court case in a Victorian
magistrate court where a former AFP officer has been charged
with stealing eighty one point six btc back in twenty nineteen.
At the time it was worth four hundred and ninety
two thousand. It's now worth thirteen million dollars. So the
important point is this magistrate, when handed down this ruling,
has stated that this is to be treated as property
(01:31):
and treated as cash, not shares or gold. So this
former AFP officer is to be charged with stealing cash.
Now these flies in the face of how the ATO
has treated cryptocurrency since twenty fourteen. So since twenty fourteen
they have stated cryptocurrency is an asset, like shares or property.
(01:53):
When you sell or dispose of that, it triggers the
capital games event that you must report.
Speaker 3 (01:58):
To the ATO.
Speaker 2 (01:59):
So a disposal of cryptocurrency includes the following. It includes
gifting it to someone else, It includes using it to
purchase goods or services.
Speaker 3 (02:11):
It includes cashing it out for fee.
Speaker 2 (02:13):
It it also includes exchanging one currency for another.
Speaker 3 (02:17):
So if that happens, it triggers the capital gains event.
Speaker 2 (02:19):
You then report that to the ATO on your tax
return and if there's a profit, you pay capital gains
tax on it. So this ruling is actually upheld how
we've treated cryptocurrency specifically, they stating bitcoin is going to
be thrown on its head basically, so they're talking about
possibly a billion dollars in refunds to taxpayers who have
(02:42):
held bitcoin since twenty nineteen because it goes back to
the date when this happened. Now, this is just a
major ruling, so they're expecting an appeal by the end
of this year, and if it is upheld, then what's
going to happen. This is the interesting thing seeing how
the ATO has actually I've treated it up until now,
so they're stating bitcoin at the moment, but it could
(03:05):
further extend to all cryptocurrency.
Speaker 3 (03:07):
So this is definitely one to watch about.
Speaker 2 (03:10):
A possible rule change to cryptocurrency in this country. As always,
if you haven't done so already, hit the follow button
for more.
Speaker 1 (03:19):
Yes, so really big news there, guys, And if you
haven't followed their Instagram account yet, you can get to it.
A tax invest Accounting absolutely brilliant tax and investment advice
on their channel. They're up for five Awards this year.
I've been following for quite a long time and I
get a lot of tidbits about tax and whatnot, and
(03:39):
it's something they have to live with. So if you're
in Australia, follow their account. They're an absolutely brilliant accounting firm.
But I've got the details here around this as well.
So I did look this up. I did verify that
this was all true, and I couldn't find the actual
court case, but this article here comes from the Australian
Financial Review. They happened to be one of our clients
(04:00):
as well. But this here is a breakdown of what
the judge had said over this particular case. So let
me read over the article here for you guys. So
a judge says bitcoin is just another form of money
exempt from capital gains tax. The judgment made public for
the first time here. It was made as a part
of a criminal case brought against a former Australian Federal
(04:22):
Police officer who allegedly stole eighty one point six bitcoin
in twenty nineteen, then valid approximately four hundred and ninety
two thousand. Today it will be worth just over thirteen
million dollars. Absolutely insane, What a way to hold and
hold your BTC by letting the Australian Federal Police look
(04:43):
after it for you and then comes back to you
when it's all good. All right, So here we go.
The Victorian Magistrate Michael O'Connor said bitcoin was property, but
akin to Australian dollar rather than foreign currency, shares or gold.
The implications is that just like exchanging a t twenty
dollars note for two tens, no tax is payable. If
(05:04):
upheld on appealed, the interlocutory decision could mean taxpayers who
paid capital gains tax on bitcoin transactions are eligible for
refunds collectively worth as much as one billion dollars. This
is absolutely saying. So I suspect the ATO is going
to pull out all their lawyers to fight this in
the appeals court so that they don't have to pay
(05:27):
out this one billion dollars. But in reality one billion
isn't that much to payback in refunds. But the main
thing here is that it's going to change the entire
Australian strained landscape when it comes to taxing cryptocurrencies. The
reasoning totally up ends ato's view because it was held
that bitcoin is Australian money. He said, that is, it
(05:47):
is not a capital gains tax asset. Therefore acquisition and
disposal bitcoin has no tax consequences, and if this actually
goes ahead, it will make taxing and reporting for digital
asset sets such as bitcoin so much easier as well.
Let me go further down here. I've got some other
highlights and the coots for this particular case. Recognizing crypto
(06:08):
as property would either make huge parts of digital economy
into property, such as points in space, invaders, likes on Instagram,
or would be inconsistent with other laws. In his judgment,
Judge O'Connell said there was no case law suggesting cryptocurrency
was property for the purpose of criminal law, although it
(06:29):
was routinely the subject of restraining orders in proceeds of
crimes and prosecutions. There have been, likewise, been a number
of family law cases that treated cryptocurrency as property for
the purposes of family law settlements without addressing the underlying
issue of whether cryptocurrency is in fact property. So all
(06:51):
these court cases previously, whatever it might be, there was
no precedents stating that cryptocurrency bitcoin was property or cash
to be treated as cash. So that's what they're arguing now,
and this seems like it's going to be the very
first case which actually defines what it's going to be
and then define all the other cases in the future
(07:15):
of how cryptocurrency is treated and then eventually or put
into law for Australia. So all the legislation that's going
round at the moment to try and change the way
that cryptocurrency, bitcoined, cadano, whatever it might be, how that's
going to be treated in the legal landscape in Australia
can be all defined in this particular court case if
(07:35):
it gets passed through. I really hope it does, because
a lot of people do treat cryptocurrency as cash. The
idea of being able to use your BTC to buy
a cup of coffee is really appealing. You could possibly
participate in defy, just like putting money into a bank
and earn interests of that. So that is the direction
(07:56):
that the market and the industry would like to go.
And if this ruling is through, it has massive impacts
for everyone here in Australia and a lot of the
laws like this once there is a precedence that really
is cemented in one other country. Other countries can use
that because they follow common law, they can use that
precedence to actually push through into their legal systems as well.
(08:19):
The Australian legal system actually follows British common law and
we borrow a lot of precedences from their legal cases
in the past, so they could also use that from
our own legal system and pass it over to their
court cases. So this is a really interesting landscape that
we are in at the moment and it's definitely something
(08:40):
I'll be watching carefully and reporting on. So the Australian
court system does have multiple different levels here, so it's
going through this state court system at the moment, so
it will pass up through the levels of the court
here through appeals and may very well make it up
to the High Court of Australia where they will be
making the final judgment where the coin could be treated
(09:01):
as cash or as an asset where it be subjects
still under capital gains tax. Really big news, guys. Hopefully
we get a positive outcome here for the cryptocurrency industry overall.
But I'll keep you guys up to date with everything
that's happening in this space here and make sure you
hit that thumbs up like subscribe if you haven't done
so ready. I'll see you guys in the next video.
Could your bitcoin profits be tax free? And this is
a big landmark case in Australia at the moment where
the judge has ruled that bitcoin is to be treated
as cash as opposed to an asset or property. This
completely flips on its head how the Australian tax offers
has been treating bitcoin and cryptocurrencies at the moment. That
(00:20):
could mean that we won't be paying capital gains tax
in the future. And also, since this case was back
in twenty nineteen, they would have to repay anyone that
has paid capital gains tax since twenty nineteen. This is big.
Let's get into the details here everyone. I'm Peter Bury.
If it's the first time here a hit that thumbs
up like subscribing notification belt. I talk everything about Kadano
(00:42):
and cryptocurrency here and we'll be covering this case in
more detail. But let's get into the details here. I
think this video here from the Tax invest Accounting Instagram
page says it really well. So let me just play
this clip for you guys.
Speaker 2 (00:56):
A landmark ruling in a Victorian magistrate court lead to
the ATO paying out one billion dollars to taxpayers who
have held bitcoins since twenty nineteen.
Speaker 3 (01:07):
Let's talk about this.
Speaker 2 (01:08):
So there was a recent court case in a Victorian
magistrate court where a former AFP officer has been charged
with stealing eighty one point six btc back in twenty nineteen.
At the time it was worth four hundred and ninety
two thousand. It's now worth thirteen million dollars. So the
important point is this magistrate, when handed down this ruling,
has stated that this is to be treated as property
(01:31):
and treated as cash, not shares or gold. So this
former AFP officer is to be charged with stealing cash.
Now these flies in the face of how the ATO
has treated cryptocurrency since twenty fourteen. So since twenty fourteen
they have stated cryptocurrency is an asset, like shares or property.
(01:53):
When you sell or dispose of that, it triggers the
capital games event that you must report.
Speaker 3 (01:58):
To the ATO.
Speaker 2 (01:59):
So a disposal of cryptocurrency includes the following. It includes
gifting it to someone else, It includes using it to
purchase goods or services.
Speaker 3 (02:11):
It includes cashing it out for fee.
Speaker 2 (02:13):
It it also includes exchanging one currency for another.
Speaker 3 (02:17):
So if that happens, it triggers the capital gains event.
Speaker 2 (02:19):
You then report that to the ATO on your tax
return and if there's a profit, you pay capital gains
tax on it. So this ruling is actually upheld how
we've treated cryptocurrency specifically, they stating bitcoin is going to
be thrown on its head basically, so they're talking about
possibly a billion dollars in refunds to taxpayers who have
(02:42):
held bitcoin since twenty nineteen because it goes back to
the date when this happened. Now, this is just a
major ruling, so they're expecting an appeal by the end
of this year, and if it is upheld, then what's
going to happen. This is the interesting thing seeing how
the ATO has actually I've treated it up until now,
so they're stating bitcoin at the moment, but it could
(03:05):
further extend to all cryptocurrency.
Speaker 3 (03:07):
So this is definitely one to watch about.
Speaker 2 (03:10):
A possible rule change to cryptocurrency in this country. As always,
if you haven't done so already, hit the follow button
for more.
Speaker 1 (03:19):
Yes, so really big news there, guys, And if you
haven't followed their Instagram account yet, you can get to it.
A tax invest Accounting absolutely brilliant tax and investment advice
on their channel. They're up for five Awards this year.
I've been following for quite a long time and I
get a lot of tidbits about tax and whatnot, and
(03:39):
it's something they have to live with. So if you're
in Australia, follow their account. They're an absolutely brilliant accounting firm.
But I've got the details here around this as well.
So I did look this up. I did verify that
this was all true, and I couldn't find the actual
court case, but this article here comes from the Australian
Financial Review. They happened to be one of our clients
(04:00):
as well. But this here is a breakdown of what
the judge had said over this particular case. So let
me read over the article here for you guys. So
a judge says bitcoin is just another form of money
exempt from capital gains tax. The judgment made public for
the first time here. It was made as a part
of a criminal case brought against a former Australian Federal
(04:22):
Police officer who allegedly stole eighty one point six bitcoin
in twenty nineteen, then valid approximately four hundred and ninety
two thousand. Today it will be worth just over thirteen
million dollars. Absolutely insane, What a way to hold and
hold your BTC by letting the Australian Federal Police look
(04:43):
after it for you and then comes back to you
when it's all good. All right, So here we go.
The Victorian Magistrate Michael O'Connor said bitcoin was property, but
akin to Australian dollar rather than foreign currency, shares or gold.
The implications is that just like exchanging a t twenty
dollars note for two tens, no tax is payable. If
(05:04):
upheld on appealed, the interlocutory decision could mean taxpayers who
paid capital gains tax on bitcoin transactions are eligible for
refunds collectively worth as much as one billion dollars. This
is absolutely saying. So I suspect the ATO is going
to pull out all their lawyers to fight this in
the appeals court so that they don't have to pay
(05:27):
out this one billion dollars. But in reality one billion
isn't that much to payback in refunds. But the main
thing here is that it's going to change the entire
Australian strained landscape when it comes to taxing cryptocurrencies. The
reasoning totally up ends ato's view because it was held
that bitcoin is Australian money. He said, that is, it
(05:47):
is not a capital gains tax asset. Therefore acquisition and
disposal bitcoin has no tax consequences, and if this actually
goes ahead, it will make taxing and reporting for digital
asset sets such as bitcoin so much easier as well.
Let me go further down here. I've got some other
highlights and the coots for this particular case. Recognizing crypto
(06:08):
as property would either make huge parts of digital economy
into property, such as points in space, invaders, likes on Instagram,
or would be inconsistent with other laws. In his judgment,
Judge O'Connell said there was no case law suggesting cryptocurrency
was property for the purpose of criminal law, although it
(06:29):
was routinely the subject of restraining orders in proceeds of
crimes and prosecutions. There have been, likewise, been a number
of family law cases that treated cryptocurrency as property for
the purposes of family law settlements without addressing the underlying
issue of whether cryptocurrency is in fact property. So all
(06:51):
these court cases previously, whatever it might be, there was
no precedents stating that cryptocurrency bitcoin was property or cash
to be treated as cash. So that's what they're arguing now,
and this seems like it's going to be the very
first case which actually defines what it's going to be
and then define all the other cases in the future
(07:15):
of how cryptocurrency is treated and then eventually or put
into law for Australia. So all the legislation that's going
round at the moment to try and change the way
that cryptocurrency, bitcoined, cadano, whatever it might be, how that's
going to be treated in the legal landscape in Australia
can be all defined in this particular court case if
(07:35):
it gets passed through. I really hope it does, because
a lot of people do treat cryptocurrency as cash. The
idea of being able to use your BTC to buy
a cup of coffee is really appealing. You could possibly
participate in defy, just like putting money into a bank
and earn interests of that. So that is the direction
(07:56):
that the market and the industry would like to go.
And if this ruling is through, it has massive impacts
for everyone here in Australia and a lot of the
laws like this once there is a precedence that really
is cemented in one other country. Other countries can use
that because they follow common law, they can use that
precedence to actually push through into their legal systems as well.
(08:19):
The Australian legal system actually follows British common law and
we borrow a lot of precedences from their legal cases
in the past, so they could also use that from
our own legal system and pass it over to their
court cases. So this is a really interesting landscape that
we are in at the moment and it's definitely something
(08:40):
I'll be watching carefully and reporting on. So the Australian
court system does have multiple different levels here, so it's
going through this state court system at the moment, so
it will pass up through the levels of the court
here through appeals and may very well make it up
to the High Court of Australia where they will be
making the final judgment where the coin could be treated
(09:01):
as cash or as an asset where it be subjects
still under capital gains tax. Really big news, guys. Hopefully
we get a positive outcome here for the cryptocurrency industry overall.
But I'll keep you guys up to date with everything
that's happening in this space here and make sure you
hit that thumbs up like subscribe if you haven't done
so ready. I'll see you guys in the next video.
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