Cryptocurrency may have started off unregulated and under the radar, but those days are gone. The Australian Taxation Office (ATO) is keeping a close eye on all crypto-related activity—and whether you’re classified as a trader or an investor will determine how your profits are taxed.
Investor vs Trader: What’s the Difference?
The ATO distinguishes crypto investors from traders based on intent, frequency, structure, and scale:
- Investor: Holds crypto long-term for capital growth. Trading is infrequent, informal, and usually personal.
- Trader: Buys and sells crypto frequently with the intent of making a profit. Activity resembles a business—structured, documented, and often carried out under an ABN.
- How Taxation Differs
| Category | Investor | Trader |
| Tax Type | Capital Gains Tax (CGT) | Business Income |
| Discounts | 50% CGT discount if held >12 months | No CGT discount |
| Expenses | Not deductible unless related to acquisition/disposal | Deductible as business expenses |
| Record-keeping | Basic CGT records | Full business-style accounting |
- Examples of Taxable Events
- Selling crypto for AUD
- Swapping tokens (e.g. ETH to SOL)
- Using crypto to buy goods/services
- Gifting crypto
- Earning crypto through staking, airdrops, or forks (income on receipt, CGT on disposal)
- Using DeFi platforms or wrapping tokens (CGT events)
- Record-Keeping Essentials
You must keep:
- Dates and values (in AUD) of every transaction
- Purpose (buy, sell, swap, gift)
- Wallet addresses and transaction IDs
- Fees and associated costs
Tip: Use crypto tax software like Koinly or CoinTracking to simplify compliance.
ATO Surveillance
The ATO receives data directly from Australian crypto exchanges and uses data-matching programs to track undeclared gains. Anonymous wallets? Not so anonymous anymore.
FAQs: Crypto Tax in Australia
Do I pay tax if I just hold my crypto?
Not until you dispose of it (sell, swap, gift, spend). That triggers a Capital Gains Tax (CGT) event.
What if I trade crypto daily?
If your trading is regular, structured, and profit-driven, the ATO may classify you as a trader, and you’ll be taxed as a business.
Can I claim losses?
Yes. Capital losses can offset capital gains. If you’re a trader, business losses may apply against other income if rules are met.
Is staking taxable?
Yes. Staking rewards are taxed as income when received, and CGT applies when you later sell or swap the tokens.
What about NFTs?
NFTs are treated like crypto. Buying and holding is okay, but any sale, swap, or use is a CGT event.
Do I need to register an ABN to trade crypto?
Only if you’re carrying on a business. Most casual investors don’t need an ABN.
Conclusion
Whether you’re a long-term HODLer or a rapid-fire trader, your tax obligations are real—and growing. The ATO is equipped with powerful tools and third-party data to track your activity. Knowing whether you’re classified as a crypto investor or a trader can make a significant difference at tax time. Stay compliant, keep records, and consider speaking to a tax professional if your crypto activity has become more than just a hobby.
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General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
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