Will all cryptocurrency be fined? Australian Taxation Office: Retirement funds cannot invest in a single asset

Putting all the pensions in one basket is not only risky, but also illegal, as 18,000 Australians will soon find this.

The Australian Taxation Office (ATO) has begun warnings to 18,000 self-managed funds (SMSFs) that invest more than 90% of their retirement funds in a single asset class, such as real estate or cryptocurrency.

SMSFs refer to individuals who control their retirement fund investment decisions rather than handing over the management of the funds to professionals.

Crypto

The total assets involved in SMSFs are approximately $700 billion, which is a major growth area for the Australian cryptocurrency business.

ATO warned in the letter that SMSFs have “obligation to comply with legal requirements and adopt an investment strategy to avoid venture capital”.

Retired people who violate the rules will face a fine of up to $4,200.

A spokesman for ATO said:

“We have seen examples of two SMSFs losing a lot of retirement savings by investing in cryptocurrencies.”

ATO Assistant Commissioner Dana Fleming said the letters were intended to remind the SMSF owners of "their legal obligations" and "remind them to potential concentration risks and regulatory issues."

In Australia, one-fifth of the SMSFs are currently operated by people under the age of 45, while established exchanges such as CoinSpot and Independent Reserve provide such services directly to SMSFs.

It is reported that the Indian exchange Zebpay was attracted to Australia, in part because of the country's law of investment in cryptocurrency.

Zebpay CEO Ajeet Khurana said:

“Australia happens to be the only developed country that can invest in retirement funds in cryptocurrencies.”

And some service providers even told the SMSF holders:

"You can decide the percentage of pension funds that invest in cryptocurrencies, which can be 1% or 100% – entirely up to you."

This is both a bad investment advice and not correct.

In addition, the Australian Securities and Investments Commission (ASIC) and the ATO have all raised warnings about the investment risk of cryptocurrencies.

“Be wary of SMSF services that offer cryptocurrency investments. Operating SMSF requires not only a lot of time, capacity and responsibility, but also your retirement savings.”

“We strongly recommend that all trustees conduct appropriate due diligence before investing in any cryptocurrency assets.”

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

How does the derivatives market fight on the platform of the 5-year-old exchange?

Derivatives trading has become a battleground for the military, and OKex, Huobi, Gate, Fcoin, which are well-known ex...

Opinion

What happened during the first week of the SBF case in a comprehensive article?

In the first week of the trial, SBF found itself in a difficult situation with almost all the testimonies and public ...

News

Exclusive speech by Li Xiaojia, the Hong Kong Stock Exchange: In the 5G era, technologies such as blockchain will give birth to new exchanges and trading models.

On March 31, Li Xiaojia, Chief Executive Officer of the Hong Kong Stock Exchange Group, delivered a speech entitled &...

Opinion

Wall Street Journal Binance Empire on the Verge of Collapse

After the collapse of FTX, the largest cryptocurrency exchange in the world seems to be Binance. However, less than a...

Blockchain

The volatility product "Turtle Bunny Card" is available, is the coin derivative a devil or an angel?

On May 30th, Dr. George Cao, founder and CEO of BitMax.io, visited the ChainNode live room and talked to Babbitt edit...

Market

With the entry of big players and the halving narrative, is now the best time to buy Bitcoin?

Using the term "ups and downs" to describe the trend of BTC since June is not an exaggeration, or more precisely, it ...