| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052057728344
Date of advice: 16 November 2022
Ruling
Subject: Investor - cryptocurrency
Question
Are you a cryptocurrency investor through your activities in a cryptocurrency cloud minting program?
Answer
Yes.
The overall impression gained from the facts provided is that you were not carrying on a business of cryptocurrency trading, rather the activity is that of an investor who has acquired assets, via a cloud minting subscription plan, to take advantage of future growth of the assets.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
6 June 20XX
Relevant facts and circumstances
You do not hold an Australian Business Number (ABN).
You participate in a cloud minting service.
The process includes:
1. Purchasing a Cloud Minting Subscription Plan, which is effectively renting a machine or part of a machine through the WEWE Global Platform
2. The rented hardware start producing tokens for the provided and the provider releases a percentage of those tokens as rewards daily
3. The rewards (minus any service fees due) can be withdrawn as LYO credit tokens to a wallet on the WEWE platform
4. The rental agreement ends when 3 times the amount of the initial payment has been rewarded.
You anticipate that the rental period will be approximately 30 months.
You provided us with details on the plans you purchased during the 20XX financial years:
The plans included an activation fee.
Around a specified date the first machine produced around a specified amount of tokens per day and the second machine had not commencing producing tokens.
On a specified date you withdrew the accumulated LYO (minus the LYO monthly service fee). After you received the LYO credits you converted them into BTC immediately.
You kept the BTC to reinvest into an additional Cloud Minting Subscription Plan in the 20XX financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-10
Income Tax Assessment Act 1997 section 995-1
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
