A landmark court ruling in Australia may pave the way for up to $640 million in Bitcoin-related tax refunds, challenging the Australian Taxation Office’s (ATO) long-standing stance on cryptocurrency.
Judge Rules Bitcoin Is ‘Money’, Not a Taxable Asset
In a decision that could reshape the country’s cryptocurrency tax landscape, a Victorian judge has ruled that Bitcoin should be treated as a form of money rather than property. The ruling came during a criminal trial involving federal police officer William Wheatley, who is accused of stealing 81.6 Bitcoin in 2019. At the time, Bitcoin was worth around $492,000. Today, its value has surged to more than $13 million.
Judge Michael O’Connell determined that Bitcoin operates more like Australian dollars than traditional assets such as shares, gold, or foreign currencies. This interpretation directly challenges the ATO’s classification of cryptocurrencies as capital gains tax (CGT) assets since 2014.
Potential Shake-Up of Crypto Tax Policy
Under current ATO guidelines, any disposal of Bitcoin, including selling it, swapping it for another cryptocurrency, or using it to buy goods or services, is considered a CGT event and therefore subject to taxation. This framework has been the foundation of Australia’s crypto taxation policy for over a decade.
However, this recent ruling threatens to upend that approach by asserting that Bitcoin is not a CGT asset. If this view is upheld in future appeals or referenced in similar cases, it could significantly alter the tax treatment of cryptocurrencies in the country.
Tax Refunds May Total Over A$1 Billion
According to tax lawyer Adrian Cartland, the decision means that “acquisitions and disposals of Bitcoin have no tax consequences” if Bitcoin is legally recognised as money. This could open the door to widespread tax refunds, potentially totalling up to 1 billion Australian dollars (approximately $640 million USD).
Cartland stated that the judgment “totally upends” the ATO’s position and sets a possible precedent that could impact thousands of crypto investors and traders across the country.
ATO Responds with Caution
Despite the legal implications of the ruling, the ATO has yet to confirm any official figures regarding possible refunds. A spokesperson said there is no verified amount that could be returned to taxpayers if the classification of Bitcoin changes under tax law.
The ruling is expected to be closely scrutinised and may face appeals, which would determine its lasting impact on Australian tax policy. Until then, the ATO’s existing guidelines remain in force.
Broader Implications for Crypto Regulation
The case has reignited debate around how digital assets should be classified and regulated in Australia. If Bitcoin is accepted legally as money, it may prompt a broader review of existing laws and influence future legislation related to digital currencies.
While the ruling currently applies only to the specific criminal case, its potential to reshape tax and regulatory policy is already sparking major discussion within legal, financial, and crypto communities.
