SMSF trustees looking to invest in crypto assets need to be aware of the risks and regulations of holding cryptocurrency in an SMSF. Unlike traditional investments, crypto assets don't generally generate an income, and the investment strategy is based purely on the expectation that the cryptocurrency will appreciate in value. Cryptocurrencies are not a form of money but are considered capital gains tax (CGT) assets, therefore disposing of them at a profit will trigger a capital gains tax event and may result in capital gains tax.
While SMSF’s aren’t prohibited from investing in crypto assets, the investment must be allowed under the fund’s trust deed, be in accordance with the fund’s investment strategy and comply with the same regulatory requirements as applying to other investments – as set out in the Superannuation Industry (Supervision) Act (SISA) and Superannuation Industry (Supervision Regulations (SISR).
With complicated rules and strict governance in place, we strongly encourage SMSF trustees to seek professional advice before investing in crypto assets.