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Australia’s tax agency has notified the crypto exchanges operating in the country to submit personal details and transactions carried out by its citizens. The move was made after it was discovered that a portion of the 1.2 million Australians who are signed up on various digital currency exchanges fail to pay tax.
<h2 class="wp-block-heading" id="strong-cryptocurrency-use-and-tax-in-australia-strong">Cryptocurrency Use and Tax in Australia&nbsp;</h2>
Australia considers virtual currency assets that can be held for tax purposes. In essence, once a profit is made from a cryptocurrency sale, the trader is legally required to pay capital gains tax.&nbsp;
In April, the Australian Taxation Office (ATO) revealed that the details collected from these exchanges, such as user dates of birth, phone numbers, social media accounts, and transactional details, will help the agency track down users who evade taxes. Any user who exchanged their tokens for another coin or fiat currency and failed to report it would be penalised.
Many individuals use digital currency for various reasons in Australia, including investing in alternative assets, making e-commerce purchases, and gaming and gambling online at <a href="https://readwrite.com/cryptocurrency/best-bitcoin-casinos-australia/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">Australian Bitcoin casinos</a>. Kane Pepi shares that crypto gambling has become very popular in Australia due to large bonuses and huge game selections.&nbsp;
Nevertheless, the investigation will affect crypto users across all sectors. Whether it’s a Bitcoin enthusiast who makes money through mining, trading, or merely receiving crypto as a payment option, the asset will be subject to taxes.
This move made by the ATO is set to improve tax revenue inflow to the government’s coffers. A treasury report in 2022 revealed that 800,000, or 3.9%, of 20.5 million Australian taxpayers used cryptocurrencies at least once in the past three years. Essentially, since an increasing number of Australians have begun to use cryptocurrency, there’s a potential for increased tax revenue.&nbsp;
<h2 class="wp-block-heading" id="strong-the-ripple-effect-on-the-crypto-community-strong">The Ripple Effect on the Crypto Community</h2>
The steps taken by the Australian Tax Office (ATO) are bound to affect crypto users across all sectors of the economy. Digital currency enthusiasts have always revelled in the anonymity offered by <a href="https://digitalchamber.org/is-the-blockchain-anonymous/" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">blockchain technology</a>, and this change could trigger uncertainty about using crypto.
For one, cryptocurrency traders in Australia will have to deal with increased scrutiny concerning their trading losses and gains. Since the tax agency will focus more on crypto investors, they’ll be bound to reevaluate their strategies and pay more attention to tax compliance.
The focus on tax evasion in the crypto community is certain to affect the average crypto enthusiast’s trust. Since everyone who turns a profit using crypto is required to pay tax, many investors could decrease their participation in the crypto market. Others who are willing to navigate the new landscape are likely to contact their accountants and lawyers for professional tax advice before dabbling in it willy-nilly.&nbsp;
In the crypto gambling space, casino gamers who have managed to evade taxes will most likely stop participating in gambling activities, which is seen by many as a win-win for both sides as it weans out the bad eggs. Gamblers on the opposite side of this spectrum are bound to support this move since it could legitimise the crypto-gambling industry in Australia.
Nevertheless, even gamblers supporting the move can leverage the increase in the number of <a href="https://anonymouscasinos.ltd/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">no-KYC casinos</a> to make a switch. These casinos give users a free hand in terms of anonymity. In essence, these no-ID casinos don’t require players to provide <a href="https://www.swift.com/your-needs/financial-crime-cyber-security/know-your-customer-kyc/meaning-kyc" data-wpel-link="exclude" rel="noopener noreferrer nofollow">KYC information</a> or any other extensive identity verification process, allowing them to maintain some level of anonymity despite the ATO ruling.&nbsp;
The ATO’s increased scrutiny will cascade over to e-commerce outlets accepting cryptocurrency. Many of them may have to reconsider their choice, especially if it was made with profits in mind, which may be eaten into when they start paying taxes. Their option then becomes to disallow crypto payments and consider alternative options or put all or some of the tax burden on their customers, which can lead to reduced adoption of crypto by the everyday shop-goer.&nbsp;

Australia Tax Authorities Demand Client Data from Crypto Exchanges

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