Losses in Crypto Investments
Over the last few income years, the Australian Taxation Office (ATO) has seen some instances of SMSF trustees losing their crypto asset investments.
These losses have been caused by:
1. Crypto scams, where trustees were conned into investing their superannuation benefits in a fake crypto exchange;
2. Theft, where fraudsters would hack into trustees’ crypto accounts and steal all their crypto;
3.Collapsed crypto trading platforms, many of which were based overseas; and
4. Lost passwords, resulting in trustees being locked out of their crypto account and being unable to access their crypto.
Trustees thinking of investing in crypto need to be aware of the ways that crypto can be lost, including through scams, and how scams can be avoided.
Trustees can refer to ‘ACCC’s scamwatch’ and the ‘MoneySmart’ section on Australian Securities and Investment Commision (ASIC) website for useful information on how to spot scams, and what to do if they have been scammed.
Many crypto assets are not commonly considered to be financial products, which means the platform where crypto is bought and sold may not be regulated by Australian Securities and Investment Commision (ASIC). Therefore, trustees may not be protected if the platform fails or is hacked, and they will most likely lose all of their crypto.
Investing in crypto can be complex and risky, and so the ATO recommends that trustees seek financial advice before investing. Trustees can also refer to ‘SMSF investing in crypto assets’ on the ATO’s website for further assistance and information.
Ref: ATO website, SMSF Newsroom, 17 October 2023
Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Falconbridge office or Luera office in Blue Mountains office to arrange a one-on-one consultation. Just Book Free Consulation up on the right to find the appointment options.
Yan Qi CA
Mobile: 0403 050 779
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.