The Australian Taxation Office (ATO) has clarified that it will impose capital gains tax on wrapped tokens and token interactions with decentralized lending protocols. This clarification has come as a major setback to crypto holders in Australia. The ATO had previously outlined crypto capital gains as one of its key focus areas and had mentioned that nonfungible tokens (NFTs) would be scrutinized for correct tax reporting. The ATO’s clarification also states that the transfer of crypto assets to an address not owned by the sender or one that already holds a balance will be considered a taxable event. Additionally, wrapping and unwrapping tokens will also trigger a capital gains tax event. This move by the ATO has been criticized for violating the technology neutrality principle and impacting the financial future of young Australians. The crypto community has also expressed concerns about the tax implications of transferring tokens to and from centralized exchanges. The Board of Taxation in Australia is scheduled to review the tax treatment of digital assets, including the capital gains tax on crypto. In addition to these tax-related challenges, crypto holders in Australia have also faced the recent exploit of the CoinSpot exchange, resulting in the loss of $2.4 million worth of crypto.

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Information Details
Geography Australia
Countries 🇦🇺
Sentiment negative
Relevance Score 1
People Michael Bacina, Chloe White
Companies Blockchain Australia, Piper Alderman Lawyers, Australian Taxation Office, Etherscan, CoinSpot
Currencies None
Securities None

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