Cryptocurrency Law.

Complying with proper regulations is critical for advising on cryptocurrency, exchanges and fund structures. Chamberlains experienced Cryptocurrency Team work with private clients, institutional investors, SMSF’s and corporations to provide advice on a range of areas.

Taxation & Superannuation

Tax is a major factor for cryptocurrency investors, traders, miners and many businesses.  The current tax system is not built to handle cryptocurrency well which causes headaches for all.

As an asset with often dramatic price fluctuations, capital gains tax can apply when you sell, trade and convert it, or when it is used to obtain goods or services. Similarly, if you are ‘carrying on a business’ that involves transacting with cryptocurrency, trading stock rules can apply. Crypto holders, traders and transactors need to stay on top of their tax obligations and business structure, or risk large and complicated tax bills.

Self managed superfunds (SMSF’s) trustees and members need to be aware of their tax requirements when engaging in transactions involving cryptocurrency. Each SMSF is unique, and the consequences of holding crypto in an SMSF portfolio will change depending on the funds circumstances. SMSF’s also have regulatory considerations and requirements and must exercise caution when investing in cryptocurrency.

Regulatory Status

Complying with proper regulations is critical for advising on cryptocurrency, exchanges and fund structures.

Cryptocurrency is classed as a financial product under the Corporations Act 2001 (Cth) and falls within the scope of Australia’s financial services regulatory regime and the jurisdiction of ASIC. There is no dedicated legislation dealing specifically with cryptocurrency, however ASIC has released whitepapers to provide regulatory guidance.

Regulatory status within Australia and globally is generally unclear, and it is important that you seek the right advice to ensure you comply.

Litigation & Disputes

Decentralised blockchain technology and the commerciality of the market has naturally given rise to crypto disputes. Whether it be transactions, ownership, intellectual property or regulation, the risks for the unaware investor remain very high.

There have been a number of significant collapses in crypto-exchanges and the potential for cross-border insolvency in a volatile market.

Compliance with Anti-Money Laundering Laws & AUSTRAC

Digital currency exchange providers must be registered with AUSTRAC before they can provide exchange services. Chamberlains can assist your exchange with registration, refused or suspended registrations, 3 year renewals of registration and keeping your records up to date.

Failure to comply with obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 may render you liable to civil penalty orders, enforceable undertakings, infringement notices and remedial directions.

Exchanges and wallets

Digital exchanges and wallets allow the buying and selling of cryptocurrency and a method of storing your assets. Where a platform deals with crypto assets, the platform is operating a market and a range of Australian laws can apply. Wallets that store assets, or tokens, are financial products and you must ensure you hold the appropriate custodial and depository authorisations.

Chamberlains not only advises on a wide range of crypto and stable coins, but also accepts payments in cryptocurrency.

Innovators, investors, promoters & asset managers

Chamberlains works with private clients, institutional investors, SMSF’s and corporations. If you are providing advice or intermediary services for crypto-assets, you are required to hold an AFS license and will be subject to stringent regulations. Chamberlains can assist you navigating these regulations

Cryptocurrency estate planning

Planning your estate is not often the first priority, though with crypto-assets it is important that these assets are documented and protected. This is especially so for documenting access to your crypto assets including your recovery phrase.

Chamberlains can assist with documenting and protecting this critical information to ensure your crypto assets are safe.

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